Gold declines as dollar strengthens

London, Aug 1. Gold prices declined here toay as the dollar strengthened further, sapping demand for the metal as an alternative investment. Gold slipped 0.2 per cent to USD 1,322.95 an ounce after gaining 0.4 per cent. Silver declined 0.7 per cent to USD 19.70 an ounce. The US Dollar Index, tracking the greenback against 10 currencies, gained for the third session. Bullion and the dollar tend to move inversely. The US currency advanced even after the Federal Reserve said yesterday it will keep buying debt to stoke the US economy and inflation will rebound in the "medium term". Bullion climbed 7.3 per cent in July after Fed Chairman said it's too early to decide whether to begin paring asset purchases in September. Holdings in gold-backed exchange traded products fell 3.6 per cent last month, the least since March. Gold ETPs shrank 25 per cent this year.