Gold Trades Near Two-Month High in Asia on Weak Dollar Outlook

May 25 (Bloomberg) -- Gold traded little changed near the highest in more than two months as a weakening dollar spurred interest in the precious metal as a haven investment.

Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, rose for the first time since May 13. Assets stood at 1,118.76 metric tons on May 22, according to figures on the company’s Web site. The Dollar Index, which measures the greenback against six major trading partners, was little changed after falling to the lowest this year on May 22.

“With a global recovery unlikely to be smooth, the two main risks to most asset values are inflation and the U.S. dollar -- both of which are decisively gold-positive,” Morgan Stanley analysts led by Hussein Allidina said in a report.

Gold for immediate delivery was at $955.70 at 2:23 p.m. in Singapore. The metal advanced to $961.33 May 22, the highest since March 20. Gold for June delivery in New York was down 0.3 percent at $956.10. The U.S. is closed for a holiday today.

The dollar approached its weakest level this year against the euro before the release of an Ifo Institute for Economic Research report today that economists say will show German business confidence rose in May, extending April’s rebound from a 26-year low. The dollar was at $1.4017 per euro from $1.3998 in New York on May 22, when it tumbled to $1.4051, the lowest level since Jan. 2.

Twenty-three of 30 traders, investors and analysts surveyed by Bloomberg News, or 77 percent, said gold would climb this week. Five forecast lower prices and two were neutral.

Among other precious metals for immediate delivery, silver was little changed at $14.66 an ounce, platinum lost 0.2 percent to $1,154.25 an ounce and palladium dropped 0.3 percent to $233 an ounce as of 2:27 p.m. Singapore time.