By Yinka Kolawole
Gold gained in New York on signs of slower growth in the U.S. and China and speculation that a weakening dollar will boost demand for the metal as an alternative investment.

The Federal Reserve yesterday cut its forecast for the U.S. economy’s expansion, and China said the pace of growth dropped in the second quarter.

The dollar fell to the lowest level in more than nine weeks against the euro today. Gold futures, which typically move inversely to the greenback, are trading 4.2 percent below a record set last month.

“The safe-haven part for demand is important and will be the most important thing to watch in the next few weeks,” said Dan Smith, an analyst at Standard Chartered Plc in London. “Gold seems to be reverting back to its relationship with the dollar. There is also an argument that the selloff in gold from its high was overdone.”

Gold futures for August delivery added $6.90, or 0.6 percent, to $1,213.90 an ounce at 8:05 a.m. on the Comex in New York. Gold for immediate delivery in London was 0.5 percent higher at $1,214.04 an ounce.

Bullion rose to $1,211.75 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,207 at yesterday’s afternoon fixing. The dollar slid as much as 0.7 percent against the euro today.