Gold Steady in N.Y. as Dollar Gains Against Euro; Silver Drops

March 1 (Bloomberg) -- Gold was little changed in New York, halting a two-session rally, as the dollar climbed against the euro, eroding demand for the metal as an alternative investment. Silver fell from the highest price in almost a month.

Greece must do more to cut its budget deficit, said Olli Rehn, the European Union’s monetary affairs commissioner, after meeting with Greek Finance Minister George Papaconstantinou. Concern about Greece’s debt situation fueled last month’s dollar rally. The U.S. currency climbed as much as 1.3 percent against the euro today. Gold often falls when the greenback gains.

“We expect the euro and broad risk sentiment to provide further direction for gold,” James Moore, an analyst at TheBullionDesk.com in London, said in a report.

Gold futures for April delivery slipped 60 cents to $1,118.30 an ounce on the New York Mercantile Exchange’s Comex unit. In London, gold for immediate delivery was unchanged at $1,117.60 at 9:07 p.m. local time.

Earlier gold rose as much as 0.4 percent in New York as industrial metals including copper climbed. Copper jumped as much as 6.2 percent to a seven-week high on concern that the 8.8-magnitude earthquake in Chile, the world’s biggest producer, on Feb. 27 may disrupt supplies.

“Base metals rallied strongly due to the earthquake in Chile and this is one factor that has been pushing other commodity prices up,” said Peter Fertig, the owner of Quantitative Commodity Research Ltd. in Hainburg, Germany.

Silver futures for May delivery fell 5.2 cents, or 0.3 percent to $16.469 an ounce in New York. Earlier, the most- active contract reached $16.77, the highest price since Feb. 3. Industrial-metal mines produce more than two-thirds of silver output, as a byproduct, according to Deutsche Bank AG.

“There is a good correlation between silver and copper,” Fertig said. “If there’s negative output for copper, it affects silver.”

Also on the Nymex, platinum futures for April delivery gained $4.10, or 0.3 percent, to $1,544 an ounce. June palladium futures advanced $4.25, or 1 percent, to $438 an ounce.