Gold Prices Fall for a Second Day

Gold fell in London for a second day as a rally in the dollar eroded the appeal of the precious metals as an alternative asset. Silver was little changed., Bloomberg 8/25/2008 6:14:59 AM

Gold, priced in dollars, often moves in the opposite direction to the U.S. currency. Bullion jumped 4.5 percent last week, the biggest weekly gain in six months, while the dollar index fell 0.5 percent. Oil dropped by more than $6 a barrel on Aug. 22, the most in percentage terms for more than three years.

Bullion for immediate-delivery fell as much as 0.7 percent to $817.58 an ounce and was at $822.85 at 11:24 a.m. in London. Silver for immediate delivery traded at $13.39 an ounce, up 0.2 percent.

The dollar also rose for a second day against the euro on speculation a drop in oil prices will support the U.S. economy.

The dollar gained to $1.4767 per euro in London from $1.4793 in New York on Aug. 22. The U.S. currency advanced to 109.93 yen from 110.07 yen.

Gold may rise for a second straight week on speculation the dollar's rally against the euro will stall, boosting the precious metal's appeal as an alternative investment, according to a Bloomberg News survey on Aug. 21 and Aug. 22.

Gold for December delivery was down 0.7 percent to $828.20 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange in London. Bullion for December delivery on the Shanghai Futures Exchange fell 2.4 percent to 182.17 yuan a gram ($827.26 an ounce).