March 25, 2010, 2:58 PM EDT

By Nicholas Larkin and Kim Kyoungwha

March 25 (Bloomberg) -- Gold rose in New York today as the dollar halted its rally and after the metal’s slide to a six- week low attracted investors.

The dollar fell against the euro as Luxembourg Prime Minister Jean-Claude Juncker said that there will be a mix of International Monetary Fund “instruments and bilateral loans” to help Greece. Bullion slumped yesterday to the lowest price since Feb. 12 as the dollar rose to a 10-month high on Greece’s budget crisis and a downgrade of Portugal’s credit rating.

“There’s very good physical demand, especially out of the Far East, and people are taking advantage of the lower prices,” said Bernard Sin, head of currency and metals trading at MKS Finance SA, a bullion refiner in Geneva. The market is still “concerned” about Greece and Portugal, he said.

Gold futures for April delivery rose $4.10, or 0.4 percent, to $1,092.90 an ounce on the Comex in New York. The metal is down 0.3 percent this year.

After settling, gold pared today’s gains in electronic trading following European Central Bank President Jean-Claude Trichet’s comment that the possibility of International Monetary Fund help for Greece is “very, very bad.”

Futures were up $1.80 from yesterday to $1,090.60 an ounce at 2:52 p.m. in New York.

Concern over the ability of European nations including Portugal and Greece to reduce budget deficits has dragged the euro down this year. Gold typically gains when the dollar declines.

Merkel Clout

Juncker’s comments, before a meeting of European Union leaders in Brussels today, came after German Chancellor Angela Merkel said she supports loans to debt-laden Greece from the IMF and regional governments as a last resort if default looms. Asserting her clout as head of the EU’s largest economy, she ruled out an aid decision at today’s summit, and pushed for the IMF to be part of any potential rescue.

The ECB’s Trichet said policy makers will extend their emergency collateral rules beyond 2010. The bank was scheduled to reintroduce pre-crisis rules at the end of this year.

Also in New York, silver futures for May delivery advanced 10 cents, or 0.6 percent, to $16.741 an ounce, after dropping near a three-week low of $16.55 reached yesterday.

Platinum futures for July delivery rose $18.40, or 1.2 percent, to $1,611.80 an ounce on the New York Mercantile Exchange. June palladium futures slipped $1.30, or 0.3 percent, to $452.60 an ounce on the Nymex.

--With assistance from Pham-Duy Nguyen in Seattle. Editors: Ted Bunker, Jessica Brice.

To contact the reporters on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net

To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net.