Feb. 11 (Bloomberg) -- Gold fluctuated in London on speculation an improving economy will curb demand for an alternative asset that investors may buy amid political turmoil in Egypt. Gold exchange-traded product holdings slipped to an eight- month low as data showed an improving U.S jobs market and a report today may show consumer confidence climbed. China this week raised interest rates for the third time since October to cool growth and inflation. Egyptian President Hosni Mubarak defied calls for his immediate resignation as thousands of protesters demanded an end to his 30-year rule. “Perhaps a lack of return of investors is tied to stronger economic data,” Tom Pawlicki, an analyst at MF Global in Chicago, said today in a report. “The market will be supported by events in Egypt.” Immediate-delivery bullion fell 83 cents, or 0.1 percent, to $1,362.97 an ounce at 9:08 a.m. in London. Prices swung between a gain and fall of 0.2 percent and are up 1 percent this week, a second weekly rise. The metal for April delivery was 0.1 percent higher at $1,363.30 on the Comex in New York. Mubarak said during a broadcast interview that he intended to stay on as president until an election in September, while handing day-to-day powers to Vice President Omar Suleiman. Mubarak’s broadcast announcement was loudly rejected by the tens of thousands of opponents in Tahrir Square following expectation that he was preparing to quit. Bullion has declined 4.1 percent this year as signs the economic recovery is strengthening curbed demand for a protection of wealth. Concern about rising inflation and currency debasement drove prices up 30 percent last year, reaching a record $1,431.25 in December. Inflation Concern China this week joined India, Indonesia, Thailand and South Korea in boosting interest rates as Asian policy makers sought to cool the economies leading a global rebound. The U.S. Dollar Index headed for its first weekly advance in a month on speculation inflation will accelerate as the U.S. labor market improves. The “interest rate hike in China shows real concern about inflation,” said Wallace Ng, executive director with ABN Amro Securities Asia Ltd. in Hong Kong. “We expect more buying from China. That should increase local people’s interest in gold purchases as an inflation hedge.” Gold held in ETPs fell 4.33 metric tons to 2,019.41 tons yesterday, the lowest level since June 7, data compiled by Bloomberg from 10 providers show. Holdings reached a record 2,114.6 tons in December. Silver for immediate delivery in London declined 0.3 percent to $30.13 an ounce. Palladium was little changed at $822 an ounce after climbing to $839.63 on Feb. 9, the highest price since March 2001. Platinum was 0.1 percent higher at $1,829.80 an ounce. It reached $1,867.25 on Feb. 9, the highest level since July 2008. -- Editor: John Deane To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Kyoungwha Kim in Singapore at kkim19@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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