Gold rose for a second consecutive day as the dollar declined, increasing the appeal of the precious metal to those investors who view gold as a hedge against further drops in the U.S. currency.

Gold has gained 22 percent this year and the dollar has dropped 7.9 percent against the euro. U.S. reports tomorrow may show waning consumer confidence. Gold investment demand rose 19 percent in the second quarter compared with a year earlier, the World Gold Council said yesterday.

``Prospects for further dollar weakness are definitely fueling more investor buying,'' said Costanza Jacazio, an analyst at Barclays Capital in London. ``Most of the demand side has been from investor buying.''

Gold for immediate delivery climbed $1.83, or 0.3 percent, to $630.88 an ounce at 8:53 a.m. in London. Prices rose 0.7 percent yesterday.