April 18 (Bloomberg) -- Gold prices in London, little changed, may fall for a second week on expectations the dollar will rally against the euro, making the metal less attractive as an alternative investment to U.S. stocks and bonds.

Nineteen of 42 traders, investors and analysts surveyed April 14 and April 15 expect gold prices to fall, after dropping 0.5 percent last week in London. Eighteen predicted prices will rise, and five expected little change.

``Gold may fall further should the dollar continue to firm,'' Andreas Maag, executive director of precious metals sales at UBS AG in Geneva, said in an e-mailed note. ``We believe that this is a short-term trend rather than an end to the fall in the US dollar.''

Gold for immediate delivery advanced 68 cents, or 0.2 percent, to $425.58 an ounce as of 11:40 a.m. in London. Gold could rise to near $500 an ounce toward the end of 2005 or early 2006, should the dollar continue to slide, Maag forecast.

The dollar traded at $1.2980 against the euro, from $1.2920 on April 15 in New York, according to the EBS electronic currency dealing system. Against the yen it was trading at 107.52, from 107.80 last Friday in New York.

The dollar fell after a Commodity Futures Trading Commission report showed speculators reduced bets against the U.S. currency last week, giving investors fresh opportunities to place wagers on its decline.

The CFTC figures released on April 15 suggest investors can start accumulating euros with less concern sales by hedge funds will cause their bets to go wrong, said Robert Rennie, a currency strategist in Sydney at Westpac Banking Corp.

``Positioning suggests an accident waiting to happen'' for the dollar, said Rennie. ``It's certainly not an environment where the dollar should make further gains against the yen or the euro.''

IMF Gold

Gold prices also fell after U.K. Chancellor of the Exchequer Gordon Brown in a press conference on April 16 said selling part of the International Monetary Fund's 3,217 metric tons of gold will be included in proposals being drafted for the next IMF gathering in September. Brown was speaking after the IMF's semi- annual meetings in Washington.

Hours earlier, U.S. Treasury Secretary Snow told the IMF's policy-steering committee that selling gold is neither ``necessary'' nor ``warranted.'' Any proposal to sell IMF gold can't succeed without the support of the U.S., whose 17 percent voting stake at the IMF effectively gives it veto power.

Among other precious metals for immediate delivery in London, silver rose 2 cents, or 0.3 percent, to $7.03 an ounce. Platinum fell 50 cents, or 0.1 percent, to $862.50 an ounce. Palladium was unchanged at $198.50 an ounce.

To contact the reporter on this story: Danielle Rossingh in London drossingh@bloomberg.net.

Last Updated: April 18, 2005 06:56 EDT