Dec. 8 (Bloomberg) -- Gold declined after a rally to a record prompted some investors to sell and as the strengthening dollar reduced the appeal of precious metals as an alternative asset. Silver rose, reversing an earlier decline. Immediate-delivery gold lost as much as 1 percent to $1,388.45 an ounce before trading at $1,392.57 an ounce at 3:55 p.m. in Singapore. The metal yesterday touched an all-time high of $1,431.25. Bullion priced in euros also reached a record yesterday. Silver dropped as much as 0.7 percent to $28.465 an ounce, before rebounding 0.6 percent to $28.8475. "Recent price gains have led to profit-taking by some investors," Hwang Il Doo, a senior trader at Korea Exchange Bank Futures Co. in Seoul, said by phone today. "I don't think precious metals turned to a downtrend. This is temporary profit- taking before the end of the year. Gold will continue to be favored through next year as a haven." The dollar rose for a third day against most of its major counterparts on expectations an extension of tax cuts will bolster an economic recovery in the U.S. President Barack Obama agreed to extend Bush-era tax cuts for two years. A report tomorrow is forecast to show U.S. initial jobless claims declined. Bullion typically moves inversely to the greenback. Gold has jumped 27 percent this year, heading for the 10th straight annual gain, after governments spent trillions of dollars and kept borrowing costs low to boost economies hurt by the most severe global recession since World War II. Futures for February delivery fell as much as 1.4 percent to $1,388.90 an ounce on the Comex in New York. Palladium for immediate delivery lost 0.4 percent to $729.55 an ounce, reversing an earlier advance. The price has jumped 79 percent this year. Immediate-delivery platinum declined 0.5 percent to $1,683.10 an ounce. --With assistance from Chanyaporn Chanjaroen in Singapore, Yoshiaki Nohara in Tokyo and Catarina Saraiva in New York. Editors: Richard Dobson, Matthew Oakley.

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