By Kim Kyoungwha and Nicholas Larkin Feb. 26 (Bloomberg) -- Gold gained for a second day in London, paring a weekly decline, as concerns about Greece’s debts and a stall in the dollar’s rally increased the metal’s appeal as an alternative investment. Greece may have its sovereign debt rating lowered within months if it fails to meet the objectives in its plan to reduce its budget deficit, Moody’s Investors Service said yesterday. The dollar fell as much as 0.4 percent against the euro after yesterday climbing to near a nine-month high. Gold, down for the first week in three, typically moves inversely to the greenback. “The euro zone scenario is still lingering in the market,” said Bernard Sin, head of currency and metals trading at gold refiner MKS Finance SA in Geneva. “People don’t trust the dollar, they don’t trust the euro, so the only way to go is to look as other alternatives such as gold. It’s a safe haven.” Gold for immediate delivery added $6.05, or 0.6 percent, to $1,112.40 an ounce at 9:26 a.m. local time. The metal is down 0.6 percent this week. Bullion for April delivery was 0.4 percent higher at $1,112.60 on the New York Mercantile Exchange’s Comex unit. The impact of a strong dollar “is being offset by some of the continued sovereign debt downgrade concerns in Europe,” said Ben Westmore, Sydney-based analyst with National Australia Bank. “As a safe-haven property, investors are buying gold more than selling it based on the U.S. dollar strength.” The dollar yesterday neared last week’s nine-month high after Moody’s Pierre Cailleteau said the ratings firm may lower Greece’s credit rating. Finance ministers this month put more pressure on the country to rein in its deficit, the European Union’s biggest. Strong Gains Gold prices are poised for strong gains as a “good hedge against volatile times,” Graham Tuckwell, chairman of ETF Securities Ltd., said on Bloomberg Television today. There’s “a lot of safety in commodities, particularly in gold,” he said, adding that he sees “substantial upside” for bullion. India raised import duties on gold to 300 rupees per 10 grams from 200 rupees, Finance Minister Pranab Mukherjee said today in his budget presentation. That may cut domestic demand and fuel a gain in gold prices, according to Rajesh Exports Ltd. Chairman Rajesh Mehta. Silver for immediate delivery gained 0.5 percent to $16.1725 an ounce. Platinum was 0.5 percent higher at $1,540 an ounce and palladium climbed 2 percent to $430 an ounce. --With assistance from Thomas Kuttty Abraham in Mumbai and Madelene Pearson in Melbourne. Editors: John Deane, Claudia Carpenter. To contact the reporters on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net. To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net.

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