By Nicholas Larkin and Glenys Sim Nov. 23 (Bloomberg) -- Gold jumped to a record in London and New York as a slumping dollar boosted bullion’s appeal as an alternative asset. Other precious metals gained. The U.S. Dollar Index, a gauge of the greenback’s value against six currencies, slid as much as 0.8 percent after Federal Reserve Bank of St. Louis President James Bullard said he supported extending the central bank’s purchases of mortgage- backed securities. Bullion has climbed 32 percent this year as the currency index has dropped 7.7 percent. “All this buying shows no confidence in the dollar,” said Bernard Sin, head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. “We’re going to see some physical demand in the festive season,” which may push prices to $1,200 an ounce, he said. Gold for immediate delivery climbed as much as $17.28, or 1.5 percent, to $1,167.88 an ounce and traded at $1,165.50 by 9:44 a.m. in London. Gold futures for December delivery on the New York Mercantile Exchange’s Comex division increased 1.6 percent to $1,165.40 an ounce, the seventh advance in a row, after reaching $1,167.80. The metal also rose to a record against the pound today, climbing as high as 703.24 pounds an ounce. “Sentiment is very upbeat, and gold is looking increasingly attractive,” said Stefan Graber, an analyst at Credit Suisse Group AG in Singapore. “Investor interest has spilled over from those seeking a hedge against the dollar to other buying interests, such as central-bank buying.” Dollar Forecast Bullion usually moves inversely to the dollar. The most accurate dollar forecasters predict the world’s reserve currency will fall further even when the Fed begins to raise interest rates, which policy makers say is an “extended period” away. The best forecaster of the dollar against the euro in the six quarters ended June 30 in Bloomberg’s ranking of 46 firms last month predicts the greenback will weaken to $1.58 per euro in 2010, from $1.4982 today. Gold has rallied 10 percent in the past month and is headed for a ninth annual gain, the longest winning run since at least 1948. India’s purchase of 200 metric tons from the International Monetary Fund has spurred speculation other central banks will follow suit. Central banks are the biggest holders of gold. “The market is driven psychologically,” said Chris Yoo, team manager at the global derivatives team of Samsung Futures Inc. in Seoul. “People are buying gold on expectations that the price will keep climbing. Even at record prices, people on the street are not selling their gold, which means they expect prices can go up further.” Silver Climbs Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged for a second day at 1,117.49 tons on Nov. 20, according to its Web site. The fund’s holdings reached a record 1,134 tons on June 1. Among other precious metals for immediate delivery in London, silver climbed as much as 2.1 percent to $18.89 an ounce, a 16-month high, and last traded at $18.785. Platinum gained as much as 1.8 percent to a 14-month high of $1,473.30 an ounce and was last at $1,469. Palladium rose 1.4 percent to $369.35 an ounce. Silver held in ETF Securities Ltd.’s exchange-traded products rose 0.4 percent to a record 22.634 million ounces on Nov. 20, according to the company’s Web site. Platinum holdings added 0.2 percent to a record 425,799 ounces, while palladium assets increased 1.3 percent to a record 602,793 ounces. To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net

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