Nov. 10 (Bloomberg) -- Gold, little changed today in London and New York, may decline as the dollar strengthens and some investors sell the metal to lock in record prices.

Bullion futures reached $1,111.70 an ounce yesterday. That lifted its 14-day relative strength index, a gauge of whether a commodity or security is overbought or oversold, above the level of 70 viewed by some investors as a signal of an impending retreat. The Dollar Index added as much as 0.3 percent today after yesterday slipping to a 15-month low.

“Gold is clearly overbought, gold is clearly over- participated in by the investing/speculating public, and gold needs a good sound thrashing to take the late-comers out of the positions and in the process restore relative health,” economist Dennis Gartman said in his Suffolk, Virginia-based Gartman Letter.

December gold futures lost as much as $4.20, or 0.4 percent, to $1,097.20 an ounce on the New York Mercantile Exchange’s Comex division and were last up 60 cents at $1,102 by 8:33 a.m. local time. Immediate-delivery bullion slipped 0.2 percent to $1,102 in London.

The metal dropped to $1,099.75 in the morning “fixing” in London, used by some mining companies to sell production, from $1,106.75 at yesterday’s afternoon fixing.

The Dollar Index, a six-currency gauge of the greenback’s performance, gained today on prospects investors moved before a U.S. public holiday to pare back bets on a weaker dollar and as German investor confidence deteriorated more than forecast. Still, gold futures are up 25 percent this year, heading for a ninth annual gain, as the currency index tumbled 7.6 percent. Bullion and the dollar tend to move in opposite directions.

Month End

“We expect the market to trade around $1,100 for a few days before a run at $1,150 into month-end,” Barclays Capital strategists led by Jordan Kotick wrote in a note e-mailed today.

The Group of 20 governments agreed over the weekend to keep stimulus measures and remained silent on the greenback’s decline this year, fueled by record low U.S. interest rates.

“The key issue is the dollar, but if you look at the G-20 announcement, you could make a point that it’s not just the dollar, it’s actually the yen, the euro and the dollar which are looking very weak versus the rest of the world,” Juerg Kiener, chief investment officer at Swiss Asia Capital Ltd., said in a Bloomberg Television interview today.

Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, rose 6.1 metric tons yesterday to 1,114.44 tons, the biggest increase in a month, figures on the company’s Web site showed. Gold held in ETF Securities Ltd.’s exchange-traded products added 0.4 percent to 7.941 million ounces yesterday, its Web site showed.

Silver for December delivery in New York fell 0.6 percent to $17.37 an ounce. Platinum for January delivery slipped 0.7 percent to $1,357.10 an ounce, while palladium for December delivery was 0.4 percent lower at $334.70 an ounce.

To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net;

Last Updated: November 10, 2009 08:39 EST