By Kim Kyoungwha Jan. 13 (Bloomberg) -- Gold, little changed in Asia, may extend its biggest fall in more than three weeks, on speculation that demand for commodities will ease after China took action to cool bank lending. The People’s Bank of China yesterday ordered banks to raise the amount of deposits they must put aside as reserves by 50 basis points starting Jan. 18, roiling global stocks. Prices also may dip as the dollar advanced, snapping a three-day drop against a six-currency basket. “With liquidity being tightened in China, some of the flow of hot money entering the precious metal complex looks likely to slow,” David Thurtell, a commodity analyst with Citigroup Inc. in London, wrote in a note. Gold for immediate delivery weakened as much as 0.3 percent to $1,125.63 an ounce and was at $1,128.90 at 10:26 a.m. in Singapore after rising as much as 0.4 percent earlier. The metal slumped 2 percent yesterday. February-delivery futures in New York fell 0.1 percent. The dollar rose after Federal Reserve Bank of Philadelphia President Charles Plosser said the central bank must increase interest rates “well before” unemployment falls to an acceptable level. The greenback gained for the first time in four days against the yen on speculation U.S. borrowing costs will rise at a faster pace than those in Japan, boosting the allure of assets in the world’s largest economy. The U.S. currency was at 91.03 yen as of 12:12 p.m. in Tokyo from 90.98 yen in New York yesterday, when it fell to 90.73 yen, the weakest since Dec. 21. ‘Buy on Dips’ “Gold is holding out well as there is underlying demand for the metal from investors who believe that the dollar is tilted for a further decline,” said Jeon Yeong Min, a trader with Hyundai Futures Co. in Seoul. “The market is well supported as some are still willing to buy bargains on dips.” The market is “on the lookout for” U.S. sales and jobless data tomorrow, Jeon said. Reports tomorrow may show gains in U.S. retail sales slowed and initial jobless claims rose, dousing speculation of a rise in interest rates. Sales at U.S. retailers gained 0.5 percent in December after climbing 1.3 percent in November, according to a Bloomberg News survey before the Commerce Department report. Platinum gained 0.6 percent to $1,580 an ounce after advancing as much as 1.5 percent to $1,594 an ounce. Palladium added 0.4 percent to $425.50 an ounce. Silver for immediate delivery rose 0.3 percent to $18.305 an ounce. To contact the reporter on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net

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