By Kim Kyoungwha Feb. 2 (Bloomberg) -- Gold weakened as some investors opted to sell the metal after the biggest advance in three months and the dollar resumed its rise against major currencies. Gold for immediate delivery fell 0.2 percent to $1,103.35 an ounce at 2:39 p.m. Singapore time, paring yesterday’s 2.3 percent gain, the biggest advance since Nov. 3. The greenback rose 0.2 percent against a basket of six currencies, approaching the highest level since July 2009, after Australia’s central bank unexpectedly kept its benchmark interest rate unchanged. “The rally is luring some buyers to lock in gains,” said Yu Kyung Kyu, a trader with Eugene Investment & Futures Co. in Seoul. Still, “some are betting on a further rally given that gold’s passed the key $1,085 support level.” Bullion, which typically moves inversely to the dollar, declined for a second month in January as the dollar rallied 2 percent against the six-currency basket. The metal reached a record $1,226.56 on Dec. 3. Australia’s central bank kept the benchmark interest rate at 3.75 percent, contrary to the forecasts of all 20 economists surveyed by Bloomberg News. The decision pushed the Australian dollar to the lowest level in six weeks. Against the euro, the dollar traded near the highest level in almost seven months amid concern Greece will struggle to cut its public deficit. The U.S. currency was at $1.3895 per euro at 11:57 a.m. in Singapore from $1.3931 yesterday, when it climbed to $1.3853, the strongest level since July 8. ‘Holding Up’ “Despite the strength of the U.S. dollar, the gold price is holding up relatively well,” Eugen Weinberg, a senior analyst with Commerzbank AG, wrote in a note. “Gold should also benefit from the outlook that the next fiscal year’s public household deficit in the U.S. will amount to $1.3 trillion, close to its record level of $1.6 trillion last year.” President Barack Obama yesterday sent Congress a $3.8 trillion budget that puts an emphasis on job creation, including $100 billion in additional stimulus spending. The deficit in the year starting Oct. 1 is projected at $1.3 trillion. Silver decreased 0.2 percent to $16.625 an ounce, platinum fell 0.4 percent to $1,545 an ounce and palladium lost 1 percent at $427.88 an ounce. To contact the reporter on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net

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