Gold Gains on Concern Bailout Plan May Be Delayed; Dollar Falls

By Rachel Graham

Sept. 25 (Bloomberg) -- Gold rose for the first time in three days as the dollar fell and demand for a haven against financial turmoil increased on concern the U.S. Congress will delay a $700 billion plan to bail out the banking system.

The dollar fell against the euro after President George W. Bush warned the U.S. faces a ``painful'' recession. Some senators are opposed to Treasury Secretary Henry Paulson's bailout plan.

``There's again uncertainty with the U.S. plan,'' said Susanne Toren, an analyst at Switzerland's Zuercher Kantonalbank, the manager of ZKB Gold ETF backed by about 1.83 million ounces of the metal. ``As long as the uncertainty continues downside on gold is limited,'' she said by phone from Zurich.

Gold for immediate delivery gained $4.88, or 0.6 percent, to $887.50 an ounce as of 9:53 a.m. in London. Futures for December fell $2.30, or 0.3 percent, to $892.70 in electronic trading on the Comex division of the New York Mercantile Exchange.

Silver for immediate delivery rose 17.5 cents, or 1.3 percent, to $13.435 an ounce.

Assets in Barclays Plc's iShares Silver Trust, the largest exchange-traded fund backed by the metal, rose to a record on Sept. 23. Silver held by the company gained 0.5 percent to 6,759 tons on Sept. 23, according to data on the company's Web site. The assets have risen 4.5 percent this month.

Among other metals for immediate delivery, platinum fell $9.75, or 0.8 percent, to $1,192 an ounce and palladium was unchanged at $251 an ounce.

To contact the reporter on this story: Rachel Graham in London at rgraham13@bloomberg.net