By Glenys Sim Jan. 20 (Bloomberg) -- Gold dropped for the first time in three days as the dollar strengthened, eroding demand for the precious metal as a store of value. Platinum pared an advance to a 17-month high. Bullion fell after holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by the metal, declined for a third day to 1,111.92 metric tons yesterday, according to the company’s Web site. The dollar gained against a basket of six currencies and rose to a four-month high against the euro on concern Greece’s fiscal problems will slow an economic recovery in the euro-zone. “Gold continues to trade off the greenback,” Andrey Kryuchenkov, an analyst at VTB Capital, said in an e-mail. Bullion has been “gradually decoupling” from the precious metals sector, with its performance against the platinum group metal reflecting “weakening investor interest” in gold at the moment, he added. Immediate-delivery gold declined 0.4 percent to $1,133.70 an ounce at 1:16 p.m. in Singapore, and February-delivery bullion in New York slid 0.6 percent to $1,133.60 an ounce. One ounce of platinum now costs about $513 more than an ounce of gold, a spread not seen since Lehman Brothers Holdings Inc.’s filed for bankruptcy in September 2008. Platinum prices dipped briefly to less than gold for the first time in 12 years in December 2008. Platinum ETF Platinum for immediate delivery traded little changed at $1,646.50 an ounce. Earlier the metal rose as much as 0.7 percent to $1,657.38 an ounce, the highest price since Aug. 1, 2008, on speculation demand may outpace supply as investment sales increase. Futures in New York gained as much as 0.9 percent to $1,654 an ounce. Interest in new exchange-traded funds, with holdings of about 845,000 ounces, is moving the metal further away from the industrial and jewelry markets, according to Standard Bank Ltd. The metal, used in catalytic converters, has risen 4.2 percent since Jan. 8, when ETFS Platinum Trust and ETFS Palladium Trust started trading on the NYSE Arca stock exchange. “The platinum market appears tighter than it has been for a long time,” Standard Bank’s analyst Walter de Wet said in an e-mail. “While prices can’t rise forever and there will be a supply response, it is likely to be slower than the current rise in investment demand.” To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net

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