Dec. 15 (Bloomberg) -- Gold was little changed in Asia after a drop in U.S. jobless claims and a rebound in retail sales underpinned the dollar and reduced the appeal of the precious metal as an alternative investment.

The dollar strengthened after a government report showed fewer U.S. workers filed first-time jobless claims in the past week. The U.S. currency was also supported by a report on Dec. 13 that retail sales increased last month for the first time since July. Gold tends to track movements in the U.S. currency.

``Gold has difficulty to advance due to the dollar's strength,'' said Wang Xinyou, senior gold analyst at Agricultural Bank of China in Beijing. ``Recent economic data from the U.S. all point to a sound economy there.''

Gold for immediate delivery was little changed at $625.75 an ounce at 10:11 a.m. Singapore time, after trading between $625.00 and $628.95.

``It's evident that investors are reluctant to hold big positions on gold at the year-end, so trading is very quiet,'' said Wang.

U.S. initial jobless claims fell 20,000 to 304,000 in the week ended Dec. 9, the Labor Department said yesterday in Washington.

The U.S. currency, which climbed to a three-week high against the yen, traded at 117.94 yen at 10:13 a.m. Singapore time, from 117.83 late yesterday in New York. The dollar was unchanged at $1.3144 per euro. It touched a 20-month low of $1.3367 per euro on Dec. 4, which had attracted buying to gold.

The dollar will strengthen to $1.26 per euro by June as the U.S. economy accelerates, Citigroup Inc. predicted in a research note today detailing its top currency trades for 2007.

Gold futures for February delivery rose $0.60, or 0.1 percent, to $629.70 an ounce at 10:08 a.m. Singapore time on the Comex division of the New York Mercantile Exchange.

A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.

To contact the reporter on this story: Feiwen Rong in Singapore at frong2@bloomberg.net.

Last Updated: December 14, 2006 21:18 EST