By Glenys Sim

Feb. 13 (Bloomberg) - Gold fell for the first time in four days in Asia as the rally to more than $950 an ounce prompted Chinese investors to sell the metal to lock in gains.

Bullion gained to $952.92 an ounce yesterday, the highest since July, prompting Chinese arbitragers to sell the metal in overseas markets and buy in Shanghai to take advantage of the price gap, according to Lin Yuhui, at China International Futures Co. Arbitragers profit from disparities in prices of equivalent securities or commodities that are traded on more than one market.

"Gold on the international markets hasn't been able to rally in Asia because funds in China have stepped up arbitrage trading," Lin said from Shenzhen today.

Bullion for immediate delivery fell as much as 0.8 percent to $939.65 an ounce, before trading at $940.45 at 1:49 p.m. in Singapore. The metal is up 3.2 percent for the week as demand for a store of value gains on concern the financial crisis may worsen.

Shanghai gold for June delivery added as much as 0.2 percent to 205.99 yuan a gram ($937 an ounce) and stood at 205.74 yuan at the same time, up 2.7 percent this week.

Arbitragers "make use of overnight gains in the international market to push up domestic prices," said Lin. "At the same time, they take profit in the overseas market."

Gold for April delivery was down 0.8 percent at $941.60 in after-hours electronic trading on the Comex division of the New York Mercantile Exchange, while December-delivery gold in Tokyo was up 0.3 percent at 2,755 yen a gram ($942 an ounce).

Still, gold is up 7 percent this year, at a time when crude oil is down 22 percent, as investors concerned the recession will deepen turn to bullion as a hedge against the drop in currencies.

Gold, Currencies

Gold priced in euro and pound hit a record, while the metal priced in Swiss franc reached a 28-year high yesterday. Bullion priced in Australian and New Zealand dollars and South African rand climbed to the highest ever Jan. 30.

Overseas investors are increasing their holdings of gold at the Perth Mint in Western Australia as they seek to preserve the value of assets. The value of gold held by all investors at the Mint has doubled to "comfortably over $2 billion" in the past year, with 80 percent from overseas, Nigel Moffatt, treasurer and manager of the mint's depository, said in an interview in Perth.

"People are trying to devalue their currencies in order to give them the competitive advantage, but you can't in this environment because there's a lack of business, so if people get worried about holding currencies then gold is the place," Graham Bibby, chief executive officer of Richmond Asset Management, said in a Bloomberg Television interview today.

Among other precious metals for immediate delivery, silver fell 0.4 percent to $13.470 an ounce, platinum dropped 0.7 percent to $1,066 an ounce, and palladium declined 0.2 percent to $216 an ounce as of 1:53 p.m. in Singapore.

(To contact the reporter on this story: Glenys Sim in Singapore at Gsim4@bloomberg.net)

Last Updated: February 13, 2009 14:25 Beijing Time