June 1 (Bloomberg) -- Gold traded near a three-month closing low after the dollar rose against the euro, making the metal more expensive for buyers using the 12-nation currency and eroding its appeal as an alternative investment to U.S. stocks and bonds.

The euro was near a seven-month low against the dollar before a Dutch referendum today which is expected to reject the European Union constitution. Gold fell during the past two days after French voters rejected the constitution at the weekend, fueling concern the region's economic integration will slow, which boosted the dollar against the euro.

``We are not sure that the gold market is set to pay much attention to anything other than the direction of the dollar,'' Nell Sloane, a commodities broker with NSFutures.com in Chicago, said in a report. Gold may fall further should Dutch voters reject the constitution, she said.

Gold for immediate delivery rose 10 cents to $417.35 an ounce at 1:46 p.m. Sydney time, compared with $417.25 at 5 p.m. yesterday in New York. Yesterday, gold fell 0.3 percent to its lowest closing price since Feb 9.

A final poll before today's Dutch vote put opposition at 53.2 percent, according to a survey of 16,850 people by the Amsterdam-based Dutch Center for Political Participation between May 23 and May 29.

The dollar traded at $1.2324 against the euro at 1:12 p.m. Sydney time, from $1.2306 late yesterday in New York according to EBS, an electronic currency dealing system. The dollar rose 1.4 percent yesterday.

Wedding Season

Gold prices may fall further as demand from India, the world's biggest gold buyer, slackens after the wedding season, which runs from December through May, analysts such as Kamal Naqvi at Barclays Capital said.

``Indian traders are reporting that import requirements have fallen by at least 50 percent as the wedding season draws to an end and with the crucial rural markets busy sowing their fields ahead of the monsoon,'' London-based Naqvi said in an e-mailed note yesterday. ``The signs aren't good for gold with traders in Asia reporting soft demand from both India and the Far East.''

Gold demand from fabricators such as jewelers rose 4.6 percent last year, buoyed by strong economic growth in India, Turkey and China, research group GFMS Ltd. said in April.

``Our sales team are reporting a slow-down in physical demand despite the lower dollar price of gold, which may be indicating that the surge in interest from India is approaching an end,'' John Reade, an analyst at UBS AG in London, said in an e-mailed report yesterday.

Gold for August delivery rose $1, or 0.2 percent, to $419.90 an ounce in after-hours trading on the Comex division of the New York Mercantile Exchange at 12:57 p.m. Sydney time.

To contact the reporter on this story: Matt Chambers in Melbourne at mchambers1@bloomberg.net

Last Updated: May 31, 2005 23:52 EDT