Dec. 9 (Bloomberg) -- Gold rose in New York, halting a two- day slide, as investors snapped up the precious metal as an alternative to currencies after prices dropped from a record. Silver also rebounded. Gold futures slid 2.3 percent in the previous two days after reaching a record $1,432.50 an ounce on Dec. 7. Ireland was downgraded by Fitch Ratings and the dollar was little changed against a basket of six major currencies, after climbing for three straight days. Before today, gold gained 26 percent this year, heading for the 10th annual gain. “The bottom line is that investors are losing faith in paper money,” said Lannie Cohen, the president of Capitol Commodity Services Inc. in Indianapolis. “Gold will continue to act as the currency of choice.” Gold futures for February delivery rose $6.40, or 0.5 percent, to $1,389.60 at 9:50 a.m. on the Comex in New York. “If you were in Europe, you’d be buying gold to preserve your wealth,” Cohen said. The metal priced in euros reached a record on Dec. 7 as Europe’s debt woes spurred demand. Federal Reserve policy makers meet on Dec. 14 to discuss a potential plan to extend Treasury purchases to support the economy. U.S. President Barack Obama this week agreed to extend tax reductions to boost growth, a measure which may widen the $1.3 trillion budget deficit. Gold assets in exchange-traded products fell 3.38 metric tons to 2,097.98 tons yesterday, according to data compiled by Bloomberg from 10 providers. Holdings reached a record 2,104.65 tons on Oct. 14. ‘Happy to Buy’ “People are happy to buy here,” said Bernard Sin, the head of currency and metal trading at bullion refiner MKS Finance SA in Geneva. “There’s still a lot of concern in the euro zone and the U.S.” Silver futures for March delivery advanced 55.8 cents, or 2 percent, to $28.81 an ounce on the Comex. The metal reached $30.75 on Dec. 7, the highest price since March 1980. Palladium futures for March delivery gained $18.25, or 2.5 percent, to $747.20 an ounce on the New York Mercantile Exchange. Platinum futures for January delivery rose $8, or 0.5 percent, to $1,689.40 an ounce. Platinum ETP holdings jumped 0.94 ton to 35.76 tons yesterday, the highest amount since at least February, data compiled from three providers show. Palladium assets gained 1.94 tons to 67.44 tons, also the highest amount since at least February. --Editors: Steve Stroth, Patrick McKiernan. To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net. To contact the editors responsible for this story: Steve Stroth at sstroth@bloomberg.net

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