(Corrects headline to show gold fell, not rose.)
Nov. 14 (Bloomberg) -- Gold futures declined for the third time in four sessions as the dollar’s rebound reduced the appeal of the precious metal as an alternative asset.
The euro dropped as much as 1.1 percent against the greenback as Italy’s borrowing costs increased to a euro-era record, stoking concern that a new government will struggle to contain debt turmoil. Last week, gold topped $1,800 an ounce on demand for a haven as fiscal woes in Greece escalated.
“The inverse relationship between the dollar and gold is working,” Lance Roberts, the chief executive officer of Houston-based Streettalk Advisors, said in a telephone interview. “The fear trade may, however, emerge soon and push gold higher.”
Gold futures for December delivery fell 0.5 percent to settle at $1,778.40 an ounce at 1:49 p.m. on the Comex in New York. Last week, the metal gained 1.8 percent, the third straight increase.
The price has jumped 25 percent this year, heading for the 11th straight annual gain amid escalating debt in Europe and the U.S.
“We believe uncertainty in the ongoing situation in Europe will continue to support the 10-year gold bull market into 2012 and expect the all-time high in real terms will be challenged,” Hussein Allidina, the head of commodity research at Morgan Stanley, said in a report.
Silver futures for December delivery fell 1.9 percent to $34.024 an ounce in New York. The metal has advanced 10 percent this year.
On the New York Mercantile Exchange, platinum futures for January delivery dropped 0.2 percent to $1,644.10 an ounce. Palladium futures for December delivery climbed 0.2 percent to $664.30 an ounce.
--Editor: Patrick McKiernan
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