April 24 (Bloomberg) -- Gold declined for a sixth trading session in London as the dollar strengthened against the euro, eroding demand for the precious metal as a hedge against further drops in the U.S. currency.

The euro extended declines against the dollar after an industry report showed German business confidence dropped more than expected in April. Gold has advanced 7.7 percent this year while the euro has gained 7.8 percent against the dollar.

Gold for immediate delivery fell $3.58, or 0.4 percent, to $900.67 an ounce as of 12:02 p.m. in London. Gold futures traded in New York fell $6.40, or 0.7 percent, to $902.60 an ounce.

``Gold could fall to $885 today depending on the euro-dollar and oil,'' said Wolfgang Wrzesniok-Rossbach, head of marketing and sales at Hanau, Germany-based Heraeus Metallhandels GmbH.

Gold has also gained this year as crude oil rose to a record. Some investors buy precious metals as a hedge against inflation. Crude oil fell as much as 1 percent today in New York trading, paring its annual gain to 22 percent.

``The excitement we saw at the beginning of the year was clearly unsustainable,'' said Adrian Ash, head of research at BullionVault, which holds 7 tons of gold for private investors. ``A lot of the speculative froth has come off now.''

Gold Assets Decline

Assets in the StreetTracks Gold Trust, the largest exchange- traded fund backed by bullion, fell for a second consecutive day.

Gold held by the company declined about 11.7 metric tons, or 1.9 percent, to 611.8 tons, according to figures on the StreetTracks Web site.

``This reduction is nothing out of the ordinary,'' said John Reade, a metals analyst at UBS AG in London. ``If it continues, then it may be a sign that longer-term investors are taking profits.''

Platinum slid 0.2 percent to $1,992 an ounce, extending yesterday's 1.4 percent decline after Mitsui Mining & Smelting Co. said it plans to sell a diesel exhaust catalyst that uses silver instead of platinum. Autocatalysts are the single biggest use for platinum.

The new technology ``could add further near-term weakness to platinum prices,'' Standard Bank said in a report today.

Silver for immediate delivery fell 5 cents, or 0.3 percent, to $17.09 an ounce. Palladium dropped 88 cents, or 0.2 percent, to $443.63 an ounce.

Aquarius Platinum Ltd. today said fiscal third-quarter production fell to its lowest since the end of 2005 after a walkout by workers and power cuts in South Africa and Zimbabwe.

Production of platinum-group metals in the quarter ended in March fell to 111,524 ounces, from 137,456 ounces in the previous quarter. Full-year output should be 520,000 to 530,000 ounces, compared with 530,276 ounces last year, Aquarius said.

To contact the reporter on this story: Rachel Graham in London at rgraham13@bloomberg.net

Last Updated: April 24, 2008 07:53 EDT