London: Gold fell in London as the dollar strengthened against currencies including the euro, diminishing the metal's appeal as an alternative investment, and as mines in South Africa resumed output after power cuts.

Gold has had a correlation of 0.76 against the euro-dollar exchange rate in the last three months, compared with 0.66 in the previous three months. Companies including Gold Fields resumed some production in South Africa yesterday. Gold for immediate delivery, which traded higher in Asian region, fell in London by 6.79 dollar, or 0.7 per cent, to 922.61 dollar an ounce. It reached a record 936.61 dollar yesterday. The metal has advanced 10 percent this month, the best performance since September.

The Federal Reserve reduced its benchmark interest rate by half a percentage point to 3 per cent yesterday. The Fed said in a statement that ``downside risks to growth remain. Gold Fields, Africa's second-largest gold producer, today said output from its South African mines may plunge by 25 per cent this quarter and power rationing could lead to shaft closures.

A national power shortage shut most South African mines for five days over the last week and electricity supplies will be limited to about 90 percent of normal levels.

Source : PTI