Feb. 10 (Bloomberg) -- Gold futures rose for the second day in six amid speculation a report today may show the U.S. trade deficit was the second-highest on record, eroding the value of the dollar and boosting the metal's appeal as an alternative.

The projected deficit in goods and services trade may have fallen to $57 billion in December, from a record $60.3 billion the previous month, according to the median estimate of 69 economists surveyed by Bloomberg. Gold futures rose 1 percent Jan. 12 after the deficit widened more than expected in November, sending the dollar lower against the euro.

``The market is expecting the trade deficit to be near a record, which should put pressure on the dollar and bring gold back into favor,'' Daniel Hynes, a natural resources analyst at Australia & New Zealand Banking Group in Melbourne said.

Gold for April delivery rose as much as $1.70, or 0.4 percent, to $416.20 an ounce in after-hours trading on the Comex division of the New York Mercantile Exchange. The contract traded at $416.00 at 4:51 p.m. Sydney time.

The contract gained 20 cents yesterday, after earlier falling to $411.50 in intraday trading as the dollar gained. That's the lowest for a most-active contract since Oct. 13.

The trade gap may have narrowed as the value of foreign oil declined and a weaker dollar, which reached a record low against the euro in December, helped exports, economists said. Last month, economists predicted a trade gap of A$54 billion for November, compared with the $60.3 billion reported. The forecast $57 billion deficit will still be the second-biggest on record.

``If there's a slight narrowing in the trade deficit, it's still going to be the second largest and that's not going to bode well for the dollar,'' said Ian Stannard, a currency strategist at BNP Paribas SA in London.

The U.S. Commerce Department is due to report the December deficit at 8:30 a.m. Washington time.

Still, ``the market remains vulnerable to a further bout of dollar strength'' as a narrowing of the deficit appears likely, Kamal Naqvi, a precious metals analyst at Barclays Capital in London said in an e-mailed report.

The dollar traded at $1.2811 against the euro at 4:41 p.m. Sydney time, from $1.2805 late yesterday in New York according to EBS, an electronic currency dealing system. The dollar fell 0.3 percent yesterday.

Gold for immediate delivery rose $1.63, or 0.4 percent, to $414.80 an ounce at 4:37 p.m. Sydney time, compared with $413.17 at 1:30 p.m. yesterday in New York.

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

Last Updated: February 10, 2005 00:58 EST