Dec. 16 (Bloomberg) -- Gold rose as concerns about European sovereign debt and increasing inflationary pressure boosted the metal's appeal as an alternative investment. Silver also advanced. Immediate-delivery bullion traded 0.2 percent higher at $1,383.35 an ounce at 5:13 p.m. in Seoul. Gold lost 1.1 percent to $1,380.82 yesterday, the lowest close since Nov. 29, as the dollar gained. The February-delivery contract lost 0.2 percent to $1,383.60 an ounce on the Comex in New York. "The trend is up," Wallace Ng, executive director at ABN Amro Bank NV in Hong Kong, said by phone today. "Safe haven, that's one reason, and possible inflationary pressure. Macro- economic factors which favored gold still haven't changed. Precious metals will test low sides, but that doesn't mean that we are bearish." The Dollar Index was little changed after losing as much as 0.2 percent against a basket of six currencies today. The greenback gained the most in three weeks yesterday. The U.S. consumer-price index increased 0.1 percent in November, according to data released yesterday, while industrial output rose 0.4 percent, more than expected. The Federal Reserve this week kept its benchmark interest rate at zero percent to 0.25 percent and maintained it will continue a plan to buy back $600 billion in bonds. Consumer prices in China, the biggest producer and consumer of gold, climbed at the fastest pace in more than two years in November. Debt Contagion European governments are struggling to stop contagion spreading from Greece and Ireland to the rest of the euro region. Moody's Investors Service said on Dec. 15 it may lower Spain's Aa1 rating less than three months after a previous cut. Gold assets in exchange-traded products, or ETPs, rose 8.14 metric tons to 2,099.70 tons yesterday, the highest level since Dec. 7, according to data compiled by Bloomberg from 10 providers. Holdings reached a record 2,104.65 tons on Oct. 14. Gold has gained 26 percent this year, reaching a record $1,431.25 an ounce on Dec. 7. Silver for immediate delivery gained 1 percent to $29.0875 an ounce after yesterday dropping 2.3 percent, the biggest decline since Dec. 7. Silver holdings in ETPs increased for a fifth consecutive day, adding 8.30 tons to 15,171.55 tons, the biggest amount since at least February, data from four providers show. Cash palladium declined 0.2 percent to $748.75 an ounce and immediate-delivery platinum was little changed at $1,696.10 an ounce.

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