Gold rose in London as the dollar declined against the euro, boosting the appeal of precious metals as alternative assets.

Bullion has climbed 13 percent this year, on track for an 11th straight annual gain. Investors have increased purchases as concerns that global growth will slow lifted demand for the metal as a haven. Still, prices have dropped 1 percent since Sept. 30, heading for the first quarterly decline in more than three years.

“The market is somewhat range-bound,” Rich Ilczyszyn, the chief market strategist and founder of Iitrader.com in Chicago, said in a Bloomberg Television interview on Dec. 23. Prices may “spring” higher next year as the dollar weakens, he said.

Gold for immediate delivery rose 60 cents to $1,606.95 an ounce at 4:54 p.m. New York time. Silver declined less than 0.1 percent to $29.11 an ounce. The Comex in New York was closed for the Christmas holiday.

The dollar fell as much as 0.3 percent against the euro during holiday trading today.

“Even though there are signs of a recovery in the U.S. economy, European economic concerns still do exist and many issues require clarity and direction,” Reena Walia Nair, senior analyst at Angel Commodities Broking Pvt., said by telephone from Mumbai. “There may be a relief rally in the beginning of 2012 and some risk aversion may creep in later.”

Gold production in China, the world’s second-largest jewelry market, gained 5 percent in the first 10 months of this year to 290.752 metric tons, according to a statement from the Ministry of Industry and Information Technology. Output in October was 31.750 tons, it said.

To contact Bloomberg News staff for this story: Millie Munshi in New York atmmunshi@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

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