By Kim Kyoungwha Dec. 30 (Bloomberg) -- Gold declined for a second day as a rebounding dollar curbed investor appetite for the precious metal as an alternative asset. The dollar may gain against the euro for a third day before a report economists said will show U.S. manufacturing expanded in December for a fifth month, adding to signs the economy is gaining momentum. Gold weakened 7.3 percent in December, paring this year’s advance to 24 percent, as the Dollar Index, a six- currency gauge of the dollar’s value, rose 4 percent. “Gold prices are mirroring a rebound in the dollar with few in the market willing to trade actively,” said Park Jong Beom, a trader with Tongyang Futures Co. in Seoul. “Gold will resume its feisty rally in the new year as an economic recovery reignites talk of an inflation hedge.” Gold for immediate delivery slipped 0.4 percent to $1,092.60 an ounce at 8:34 a.m. in Singapore. Gold for February delivery in New York fell 0.4 percent to $1,093.30 an ounce. Some investors also sold the metal to book profits after gains this year, analysts said. Gold, which almost quadrupled in this decade, rising from $288 on Dec. 31, 1999, is headed for the first monthly decline since August. Demand for precious metals has surged as investors sought protection against the prospect of a currency debasement and inflation after the worst recession since World War II prompted governments worldwide to increase money supply and shore up their economic growth. Among other precious metals, platinum for immediate delivery was little changed at $1,461.15 an ounce, silver slid 0.6 percent to $16.99 an ounce and palladium was down 0.4 percent at $385.50 an ounce. To contact the reporter on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net

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