By Nicholas Larkin and Kim Kyoungwha Feb. 9 (Bloomberg) -- Gold gained in London as a weaker dollar increased demand for the metal as an alternative investment. The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, fell as much as 0.4 percent on speculation European officials will agree to help Greece tackle its budget gap. Gold typically moves inversely to the U.S. currency, which climbed for a third week last week as concern about the Greek deficit weighed on the euro. China’s sovereign wealth fund took a $155.6 million stake in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion. “The stronger euro tone has prompted some bids” in gold, James Moore, an analyst at London-based TheBullionDesk.com, said in a report. Still, the metal “remains vulnerable to further liquidation should European Union officials not agree to assist Greece.” Gold for immediate delivery gained $5.95, or 0.6 percent, to $1,068.80 an ounce at 9:04 a.m. local time. Bullion for April delivery was 0.3 percent higher at $1,069.10 on the New York Mercantile Exchange’s Comex unit. EU leaders are scheduled to meet on Feb. 11 to discuss the economic outlook, a summit that may be overshadowed by Greece’s budget woes. European finance officials are for now sticking to their line that Greece, which has a deficit of 12.7 percent of gross domestic product, won’t need outside help. Greek shares gained today after four days of declines. Bargain-Hunters “With European woes easing somewhat, the dollar is retreating and demand for investment assets including gold is coming back,” said Hwang Il Doo, a senior trader with KEB Futures Co. in Seoul. “There are some investors seeking bargains, but the strength in gold appears temporary for now.” China Investment Corp. bought 1.45 million SPDR Gold Trust shares, or 0.4 percent of the total, and became the fourth- largest holder in the U.S. Oil Fund, according to a Securities and Exchange Commission 13-F filing posted on Feb. 5. The $300 billion sovereign wealth fund pumped about $10 billion into commodity-related concerns in the second half of 2009. Bullion is down 2.6 percent this year after gaining 24 percent in 2009, a ninth consecutive increase. The metal reached a record $1,226.56 an ounce on Dec. 3. The dollar index is up 2.9 percent this year and reached the highest level in almost seven months on Feb. 5. Buying Interest “We expect gold to stabilize due to current buying interest,” Eugen Weinberg, head of commodity research with Commerzbank AG in Frankfurt, wrote in a note to clients. “The firm dollar is likely to prevent gold from rising sharply.” Gold holdings in the SPDR Gold Trust were unchanged at 1,106.38 metric tons yesterday, according to the company’s Web site. ETF Securities USA LLC filed a registration statement with the SEC for a new precious-metals fund with a proposed maximum aggregate offering price of $1.06 billion. Each share will represent a holding in gold, silver, platinum and palladium, according to the filing, dated Feb. 5. Silver for immediate delivery in London jumped 1.4 percent to $15.2075 an ounce. Platinum added 0.8 percent to $1,486.50 an ounce and palladium gained 0.6 percent to $409 an ounce. To contact the reporters on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net

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