Gold Rises as Dollar Declines Against Euro; Silver Climbs

July 30 (Bloomberg) -- Gold rose in New York as the dollar's decline against the euro boosted the appeal of the precious metal as an alternative investment. Silver also gained.
Gold generally moves in the opposite direction of the U.S. dollar, which fell the most against the euro in two weeks. Gold has gained 6.1 percent this year, while the euro climbed 3.7 percent against the dollar.
``The euro is up today, so we'll start to see some new buying coming in for gold,'' said Nick Ruggiero, a trader at Eagle Futures Inc. in New York.
Gold futures for December delivery rose $4.30, or 0.6 percent, to $676.60 an ounce on the Comex division of the New York Mercantile Exchange.
Silver futures for September delivery rose 18.8 cents, or 1.5 percent, to $12.903 an ounce. The metal is still down 0.3 percent this year.
The dollar fell as much as 0.4 percent against the euro today on speculation losses on securities backed by subprime mortgages will weaken U.S. growth.
Last week, the euro fell 1.4 percent against the dollar, the first weekly loss in seven. The August contract for gold, the most-actively traded before today, fell 3.6 percent last week after three consecutive weekly gains. The euro reached a record $1.3852 on July 24.
Gold will struggle to rally until the dollar weakens further or an aversion to risky assets triggers buying, said John Reade, an analyst at UBS AG in London.
``At the moment, investors are not yet worried enough about systemic financial risk to think about owning gold,'' Reade said.
Stocks worldwide rebounded today from a $2.1 trillion sell- off last week. The Dow Jones Industrial Average last week fell 4.2 percent and the Standard & Poor's 500 Index lost 4.9 percent.