Gold may fall in London as signs of economic recovery in the U.S. and European Union reduce the precious metal’s appeal as a haven. Silver slipped to a seven- week low. The Munich-based Ifo Institute said today that its business climate index increased to the highest since records for a reunified Germany began in 1991. Applications for jobless benefits in the U.S. decreased 37,000 in the week ended Jan. 15 to 404,000, the Labor Department said yesterday. Analysts had expected 420,000 claims. “Yesterday, we had the jobless figures out of the states, which were better than expected, and that pressured metals,” said Afshin Nabavi, a senior vice president at bullion refiner MKS Finance SA in Geneva. “We continue to see some long liquidation.” Bullion for immediate delivery fell $3.93, or 0.3 percent, to $1,342.35 an ounce at 10:22 a.m. in London. The metal tumbled 0.4 percent to $1,340.85 earlier today, the lowest level since Nov. 18. Yesterday, the price dropped 1.7 percent. The February- delivery contract fell $4.90, or 0.4 percent, to $1,341.60 an ounce on the Comex in New York. Holdings in gold-backed exchange-traded products dropped 2.16 metric tons to 2,065.41 tons yesterday, the lowest amount since Aug. 18, according to data compiled by Bloomberg from 10 providers. They reached a record 2,114.6 tons on Dec. 20. Gold is heading for a first monthly drop since July, after rising 30 percent in 2010 and touching a record $1,431.25 an ounce on Dec. 7. The price may rise next week as falling prices make the metal more attractive, according to five of 11 traders, investors and analysts surveyed by Bloomberg. Four said the price would drop and two were neutral. Silver Holdings Cash silver fell 1 percent to $27.2275 an ounce after earlier today touching $27.095, the lowest level since Nov. 30. The metal is set for a third weekly drop, the longest losing run since March. Taurus Funds Management Pty sold all the silver holdings in its $200 million precious-metals fund this month as the rally last year was excessive, Co-Manager Brenton Saunders said today. The fund stuck with a larger bet on gold, he said. Silver rallied 83 percent last year. Platinum for immediate delivery rose 0.1 percent at $1,813.85 an ounce. Cash palladium was little changed at $811.33 an ounce. To contact the reporter on this story: Tony C. Dreibus in London at tdreibus@bloomberg.net or 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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