Dec. 15 (Bloomberg) -- Gold declined for the first time in three days in London as a stronger dollar curbed demand for the metal as an alternative investment. The dollar gained against the euro after Moody’s Investors Service said Spain’s debt rating is on review for a possible downgrade, and before data forecast to show growth in U.S. industrial production, backing Federal Reserve comments that the world’s largest economy is recovering. Gold, which usually moves inversely to the greenback, reached a record $1,431.25 an ounce on Dec. 7. “Bullion prices have been under pressure this morning as a result of the stronger dollar,” James Moore, an analyst at TheBullionDesk.com in London, said in a report. Still, “ongoing uncertainties surrounding euro-zone debt, inflation and the effects of quantitative easing will continue to prompt pockets of diversification towards the safe-haven asset types.” Immediate-delivery bullion lost $3.95, or 0.3 percent, to $1,392.30 an ounce at 9:17 a.m. in London. The metal for February delivery was 0.8 percent lower at $1,392.60 on the Comex in New York. Gold gained 27 percent this year, set for a 10th annual gain, as investors lost confidence in currencies and bought precious metals as a protection of wealth. European Union leaders will meet this week amid discord about how to stem a debt crisis that’s caused Greece and Ireland to accept bailouts. U.S. Growth ‘Insufficient’ The Fed yesterday maintained a $600 billion program of debt purchasing and said that growth is “insufficient to bring down unemployment.” U.S. factory production rose 0.3 percent in November, according to the median estimate of 78 economists in a Bloomberg News survey before the Fed releases the data today. U.S. retail sales increased 0.8 percent last month, the Commerce Department said yesterday. “Expectations that the U.S. economy will improve are probably growing after retail sales rose and following the Fed meeting,” said Hwang Il Doo, a senior trader at Korea Exchange Bank Futures Co. in Seoul. “That is weighing on gold.” Gold assets in exchange-traded products fell 4.83 metric tons to 2,091.56 tons yesterday, according to data compiled by Bloomberg from 10 providers. Holdings reached a record 2,104.65 tons on Oct. 14. Silver holdings gained 73.08 tons to 15,163.25 tons, the highest amount since at least February, data from four providers show. Silver for immediate delivery in London lost 0.6 percent to $29.3025 an ounce. It rose to $30.7025 on Dec. 7, the highest level since March 1980, and is up 74 percent this year. Prices reached an all-time high of $50.35 in New York in 1980, a year after the Hunt brothers tried to corner the market. Palladium fell 0.6 percent to $756.80 an ounce. Prices climbed to $779.10 on Dec. 3, the highest price since April 2001. Platinum was 0.5 percent lower at $1,698.85 an ounce. --Editors: John Deane, Alastair Reed To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Sungwoo Park in Seoul at spark47@bloomberg.net. To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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