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By Bloomberg

Gold rebounded from the biggest decline in a week as a retreat in stocks revived demand for an alternative investment. Platinum and silver advanced.

Bullion for immediate delivery climbed as much as 0.4 percent to $1,188.13 an ounce and was at $1,187.25 at 10:47 a.m. in Singapore, according to Bloomberg generic pricing. The metal fell 1.1 percent yesterday, the most since Dec. 22, and is headed for a second straight quarterly loss.

The MSCI Asia Pacific Index of equities dropped the most in a week today as energy producers fell. Gold is 1.7 percent lower this quarter as the Bloomberg Dollar Spot Index climbed to the highest level in more than five years on expectations that the Federal Reserve will raise interest rates in 2015. While the dollar’s rise will weigh on gold prices, bullion may gain as some investors close bets on losses, according to Wing Fung Financial Group.

“Short squeezes could push gold prices higher, but it may not be really sustainable,” said Mark To, head of research at Wing Fung Financial, a trader and refiner in Hong Kong. “The market is rather thin at the moment. Gold could fall further next year because of the lack of investment demand.”

Holdings in the SPDR Gold Trust, the largest exchange- traded product backed by bullion, held yesterday at 712.3 metric tons, a six-year low. The assets contracted 11 percent this year after shrinking 41 percent in 2013.

Gold for February delivery increased as much as 0.5 percent to $1,187.80 an ounce on the Comex in New York and traded at $1,186.90. Prices fell 1.1 percent yesterday as the dollar rose.

Silver for immediate delivery climbed as much as 0.7 percent to $15.91 an ounce and traded at $15.8575. The metal lost 1.6 percent yesterday, the most in a week, and is headed for a second quarterly decline.

Spot platinum rose 0.6 percent to $1,208.50 an ounce, rebounding from yesterday’s 1.3 percent drop. Palladium traded at $810.98 an ounce from $810.25 yesterday, and is on course for the third quarterly advance this year.