By Stuart Wallace Oct. 21 (Bloomberg) -- Gold, little changed today in London and New York, may advance as a weaker dollar spurs demand from investors seeking to hedge against further declines in the currency. The Dollar Index, a six-currency gauge of the greenback’s strength, fell as much as 0.3 percent, extending its annual decline to 7.3 percent. Asian equities fell for the first time in three days and stocks in Europe also declined. Some investors buy gold to diversify their portfolios. “The outlook for gold in the near term is rather a positive one,” Tobias Merath, head of commodity research at Credit Suisse Group AG in Zurich, said in a television interview today. “This is the market that has the most leverage to the U.S. dollar so the weak U.S. dollar helped a great deal.” Gold for immediate delivery traded 75 cents lower at $1,054.45 an ounce as of 11:30 a.m. in London. The metal reached a record $1,070.80 on Oct. 14 and is heading for a ninth consecutive annual advance. Gold for December delivery dropped $3.10 to $1,055.40 an ounce on the Comex division of the New York Mercantile Exchange. The metal was at $1,053.50 in the morning “fixing” in London, used by some mining companies to sell production, from $1,061.75 at the afternoon fixing yesterday. Holdings of gold in exchange-traded commodities of ETF Securities Ltd. fell to 7.99 million ounces yesterday from 8.1 million ounces the day before, according to figures on the company’s Web site today. Gold holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged at 1,109.31 metric tons as of Oct. 20. ‘Moving Higher’ “There’s every reason to suggest gold will carry on moving higher,” David Baker, managing partner of Baker Steel Capital Managers, said in a Bloomberg Television interview. “We still see a lot of value in the market.” Hedge funds and other large speculators are holding a record long position, or bets on higher prices, in U.S. gold futures, data from the Commodity Futures Trading Commission show. The biggest bet among options traders is for gold to reach $1,200 by December. Among other precious metals for immediate delivery, silver retreated 5 cents, or 0.3 percent, to $17.445 an ounce, platinum gained $4.50, or 0.3 percent, to $1,355 an ounce and palladium dropped $1.93, or 0.6 percent, to $334.57 an ounce. Rhodium for immediate delivery added $50, or 2.8 percent, to $1,850 an ounce, according to prices from Johnson Matthey Plc on Bloomberg. That’s the highest since October last year.

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