Gold fell to the lowest price in almost two weeks

Gold fell to the lowest price in almost two weeks as the dollar recovered, eroding the precious metal's appeal as an alternative asset.

The dollar advanced for a second straight day, rising to 1.2 percent against a basket of six major currencies. Before today, gold gained 25 percent this year, touching a record for the month $ 1,424.30 an ounce for the last time the program of the speculation that the Federal Reserve to buy back bonds to boost the economy could undermine the U.S. currency ..

"The dollar's strength continues to surprise, which removes the flight to quality gold," said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago.

Gold futures for December delivery fell $ 30.10, or 2.2 percent, to settle at $ 1338.40 an ounce at 13:50 on the Comex in New York, after touching $ 1,329, the lowest price for a most-active contract since Nov. 3.

The dollar rose after a report showed factory production in the U.S. increased in October by more than three months, a sign that the economy may be recovering. Another report showed that the cost of wholesale rose less than expected last month.

"We're seeing a dramatic increase in prices, and that is deflating the balloon a little gold in terms of an inflation hedge," said Zeman.

gold assets in exchange-traded products fell by 0.7 metric ton of 2,087.52 tons yesterday from 10 suppliers. Holdings reached a record 2,104.65 tonnes on 14 October.

Gold in Euros

Dennis Gartman, economist and editor of the Suffolk, Virginia-based Gartman Letter, advocates exploitation of gold prices in foreign currencies to hedge against dollar's strength on.

"The precious metals are being pressured by the strong U.S. dollar," said Gartman. "We are bullish of gold in euros or pounds or yen terms."

Silver futures for December delivery fell 85.9 cents, or 3.3 percent, to settle at $ 25.233 an ounce on the Comex. The price has risen 50 percent this year.

Palladium futures for December delivery fell 35.40 dollars, or 5.2 percent, to close at $ 645.90 an ounce on the New York Mercantile Exchange, and platinum futures for January delivery fell $ 40.10, or 2.4 percent, to $ 1,645.70 an ounce. Platinum has gained 12 percent in 2010 while palladium rose by 58 percent.