By Pham-Duy Nguyen and Nicholas Larkin Oct. 27 (Bloomberg) -- Gold fell, heading for the longest slide since August, amid concern that the dollar will extend a rally, curbing demand for the precious metal as an alternative asset. The dollar rose for a fourth straight session against a basket of six major currencies. Yesterday, gold futures, which often move inversely to the greenback, dropped 1.3 percent, falling for a third session. “Gold doesn’t have that much buying interest,” said Matt Zeman, a metals trader at LaSalle Futures Group Inc. in Chicago. “The dollar could undergo a wicked short-covering rally, and the gold market needs to look out below.” Gold futures for December delivery fell $4.90, or 0.5 percent, to $1,037.90 an ounce at 10:56 a.m. on the Comex division of the New York Mercantile Exchange. A four-session slump would be the longest since the period ended Aug. 10. Before today, the metal climbed 18 percent this year, reaching a record $1,072 on Oct. 14. An increase in bets on a drop in futures is a “signal that an increasing proportion of market players view the current gold price as unsustainable,” Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt, said in a report yesterday. “Should this sentiment spread further, gold could come under considerable pressure.” Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by the metal, declined 1.22 metric tons to 1,106.87 tons yesterday. The all-time high was 1,134 tons on June 1. “You’re getting a lot of anxiety on whether gold can sustain a rally above $1,000 level,” Zeman said. Silver futures for December delivery fell 27.5 cents, or 1.6 percent, to $16.82 an ounce. Platinum futures for January delivery dropped $19.80, or 1.5 percent, to $1,326 an ounce on the Nymex. Palladium for December slipped $3.10, or 0.9 percent, to $330.15 an ounce. To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

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