Nov. 27 (Bloomberg) -- Gold futures dropped in New York as the dollar’s rebound damped demand for the precious metal as an alternative asset.

The greenback climbed after Dubai’s efforts to reschedule its debt rattled investors. Silver, platinum and palladium also dropped today. Spot gold reached a record yesterday, while the dollar touched a 15-month low.

“The market is reacting to the news on Dubai,” said Bernard Sin, the head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. “A dollar bounce likely means gold will sell off. People are trying to take profit.”

Gold futures for February delivery fell $13.10, or 1.1 percent, to $1,175.50 an ounce on the Comex division of the New York Mercantile Exchange. The metal climbed 7.4 percent in the previous nine sessions, the longest rally in 27 years. The price has dropped only twice this month. The Comex was closed yesterday for a U.S. holiday.

The dollar gained as much as 1 percent as Dubai World, the government investment company with $59 billion of liabilities, sought to delay debt payments.

Gold has gained 33 percent this year, heading for a ninth straight annual gain, while the dollar is down 7.7 percent. Demand for the metal by central banks, pension funds and individual investors has surged on currency and inflation concerns.

“Central banks’ appetite for gold is currently very strong,” said Stefan Graber, a commodity analyst with Credit Suisse Group AG. “We’re likely to see more central banks stepping up their gold purchases.”

This quarter, Sri Lanka, India and Mauritius have bought gold from the International Monetary Fund.

Silver futures for March delivery fell 46.5 cents, or 2.5 percent, to $18.335 an ounce in New York. Platinum for January delivery dropped $32.40, or 2.2 percent to $1,447.10 an ounce. Palladium for March delivery declined $4.30, or 1.2 percent, to $368.55 an ounce.

Silver posted a weekly loss, while platinum and palladium gained.

To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.netKyoungwha Kim in Singapore at kkim19@bloomberg.net

Last Updated: November 27, 2009 14:12 EST