By Nicholas Larkin
Nov. 16 (Bloomberg) -- Gold fluctuated in London amid signs that Ireland may have to accept a European Union bailout while the U.S. economy may be strengthening.
Ireland may use EU aid to bail out its cash-strapped banks, the European Central Bank said yesterday, stepping up pressure on the Irish government to prevent an escalation of the debt crisis. The U.S. Dollar Index, which tracks the greenback?s strength against six counterparts, traded near a six-week high before a report that economists said will show U.S. industrial production expanded. Gold usually moves inversely to the dollar.
?Support could come from safe-haven demand sparked by worries over European sovereign debt,? Tom Pawlicki, an analyst at MF Global Holdings Ltd. in Chicago, said in a report. ?Strength in the dollar? may pressure prices, he said.
Immediate-delivery bullion added $3.05, or 0.2 percent, to $1,363.65 an ounce at 9:37 a.m. in London. Prices swung between gains and losses of 0.3 percent. The metal for December delivery was 0.4 percent lower at $1,363.10 on the Comex in New York.
Ireland signaled a willingness to weigh EU measures to aid its banks, potentially abandoning a go-it-alone defense to prevent a resurgent debt crisis from destabilizing the euro. Prime Minister Brian Cowen put aid for banks on the agenda of a meeting of euro finance ministers today as ECB officials urge Ireland to set aside national pride and tap the 750 billion-euro ($1 trillion) fund created in May.
Gold assets in exchange-traded products declined 0.7 metric ton to 2,087.52 tons yesterday, according to data compiled by Bloomberg from 10 providers. Holdings reached a record 2,104.65 tons on Oct. 14.
Silver for immediate delivery in London rose 0.9 percent to $25.70 an ounce after tumbling 8 percent the previous two days. It reached a 30-year high of $29.36 last week and is up 52 percent this year.
Palladium added 0.2 percent to $673.97 an ounce and platinum was little changed at $1,671.35 an ounce.
--Editors: John Deane, Dan Weeks.
To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net.
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.
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