Gold Little Changed in Asia After Dollar Rises for Third Day

By Feiwen Rong

Aug. 26 (Bloomberg) -- Gold was little changed in Asia as the rise in the dollar against the euro eroded bullion's appeal as an alternative asset.

Gold, priced in dollars, often moves in the opposite direction to the U.S. currency, which gained for the third day today before a report forecast to show business confidence in Germany slumped to a three-year low in August. Gold jumped 4.5 percent last week, while the dollar index fell 0.5 percent.

``The gold price was choppy within a relatively narrow range,'' David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney, wrote in a report today.

Bullion for immediate delivery fell 0.1 percent to $821 an ounce at 9:54 a.m. in Singapore, after trading between $818.30 and $823.62. Silver for immediate delivery declined 0.3 percent to $13.46 an ounce.

Still, gold was underpinned by ``investment flows linked to weakness in U.S. equity markets,'' Moore said.

U.S. stocks fell the most in a month yesterday as a Kansas bank's failure and speculation American International Group Inc. will post a loss heightened concern that credit writedowns will keep rattling the financial system.

Gold for December delivery was little changed at $826.50 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange at 9:57 a.m. in Singapore.

Bullion for December delivery on the Shanghai Futures Exchange was up 0.5 percent to 183.07 yuan a gram ($832 an ounce).

In Japan, gold for June delivery on the Tokyo Commodity Exchange fell 0.3 percent to 2,906 yen a gram ($826 an ounce) at the 11 a.m. local time break.

To contact the reporter on this story: Feiwen Rong in Singapore at frong2@bloomberg.net