Oct. 28 (Bloomberg) -- Gold futures fell, capping the longest slide since March, as a rally by the dollar curbed demand for the precious metal as an alternative investment.

The greenback was up for the fifth straight session against a basket of major currencies. Gold climbed to a record $1,072 an ounce on Oct. 14, while the dollar last week slipped to a 14-month low.

“It’s all very much dollar-driven,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. “You’re seeing a direct correlation between the dollar and gold.”

Gold futures for December delivery fell $4.90, or 0.5 percent, to $1,030.50 an ounce on the Comex division of the New York Mercantile Exchange, dropping for the fifth straight session. Earlier, the price touched $1,027.10, the lowest level for a most-active contract since Oct. 7.

“Gold technically seems to be exhausted,” Pradeep Unni, an analyst at Richcomm Global Services in Dubai, said in a report. “The much-needed correction is on the way. Anticipation of continued selling pressure is keeping buyers at bay.”

Hedge funds and other large speculators in gold futures trimmed net-long positions, or bets on higher prices, by 2 percent as of Oct. 20 from a record the previous week, Commodity Futures Trading Commission data show. Miners, producers and commercial users increased their net-short positions.

Gold Fund

Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, fell 1.22 metric tons to 1,105.65 tons yesterday. The all-time high was 1,134 tons on June 1.

All of the six main industrial metals traded on the London Metal Exchange dropped today, while the MSCI World Index of shares slid for a seventh session.

Silver futures for December delivery fell 30 cents, or 1.8 percent, to $16.24 an ounce on the Comex. Platinum for January delivery dropped $12.10, or 0.9 percent, to $1,306.90 an ounce on the Nymex, and palladium for December delivery tumbled $13.15, or 4 percent, to $317.40 an ounce.

“Platinum, palladium and silver depend not only upon speculative purchases, they depend too upon industrial offtake, and it is the latter that has them depressed,” economist Dennis Gartman said in his Suffolk, Virginia- based Gartman Letter.

Platinum and palladium are used in automotive pollution- control gear. Silver, often associated with photography and jewelry, is used in industrial products from chemical catalysts to ball bearings, according to the Silver Institute.

To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

Last Updated: October 28, 2009 14:44 EDT