Breaking Market Updates present a daily selection of the most important financial news stories from around the globe, with a specific focus on the precious metals and stock markets. To view Breaking Market Updates Archives, click here.

February 8: Gold rebounds as dollar drops lower

Source: Marketwatch

New York -- Gold futures gained more than 1% on Monday, as soothed nerves over European debt woes pressured the dollar, lifting gold's appeal as a hedge. Gold for April delivery rose $13.40, or 1.3%, to finish at $1,066.20 an ounce at the New York Mercantile Exchange. It earlier rose to an intraday high of $1,074.30 an ounce. The move marked a rebound after gold lost more than $65 an ounce during a three-session losing streak.

"We're seeing a normal consolidation after last week's big sell-off but it lacked any kind of fire," said Bill O'Neil, managing partner at commodities brokerage Logic Investment Services. Gold over the past year has shown strong correlations with equities, rising alongside gains in stocks and other commodities, and moving inversely to the U.S. dollar. Martin Hennecke, an associate director at Tyche Group Ltd. in Hong Kong said demand for gold could rise as investors find out that U.S. and German bonds are not safe havens from Greek, Portuguese and Spanish bonds. See full story.

February 5: Gold falls to 3-month low as dollar gain damps demand

Source: Bloomberg

New York -- Gold futures fell to a three-month low in New York as the dollar’s rally reduced demand for the precious metal as an alternative investment. The euro fell to an eight-month low against the greenback on mounting budget concerns in countries such as Greece, Spain and Portugal. Gold capped a fourth straight weekly loss and the ninth decline in the past 10 weeks. "The dollar just keeps gaining momentum,” said Tom Schweer, a senior market strategist at LaSalle Futures Group Inc. in Chicago. “Gold could fall another $20 to $40 before people start to load up again.”

Gold futures for April delivery fell $10.20, or 1 percent, to $1,052.80 an ounce on the New York Mercantile Exchange’s Comex unit. Earlier, the most-active contract touched $1,044.50, the lowest price since Nov. 2. The metal declined 2.9 percent this week, paring its gain to 15 percent in the past 12 months. Bullion may fall to $800 before rebounding to a record when investors realize the U.S. government has exhausted tools to revive the economy, said Tom Winmill, a New-York based portfolio manager of the Midas Fund. In December, he predicted gold may average $1,500 in the fourth quarter of 2010. See full story.

February 4: Gold tumbles as Europe debt woes lift dollar

Source: Marketwatch

New York -- Gold and other metals joined a broad sell-off in commodities and stocks on Thursday, as investors fled to the safety of the U.S. dollar over mounting concerns about the debt of several European countries. Adding to the pressure on commodities during U.S. trading hours, the Labor Department reported an unexpected rise in weekly jobless claims, rekindling concerns about growth ahead of the key monthly employment report on Friday. Gold for April delivery slumped $49, or 4.4%, to end at $1,063 an ounce at the New York Mercantile Exchange.

"The real story today is the renewed fears of sovereign debt problems in Greece, in particular, that is driving the U.S. dollar with hot money that is flowing away from risk assets," said Patricia Mohr, commodity market specialist at Scotiabank Group in Toronto. "Investors are going out of gold, which is always an interesting development. It does seem to happen when risk appetite is reduced," she said. See full story.

February 3: Gold dips, dollar gains as markets pause after two-day rally

Source: Marketwatch

New York -- A two-day rally in gold and metals futures took a breather on Wednesday after mostly upbeat U.S. economic news and jitters about debt in several European countries lifted the dollar, reducing gold's appeal as a hedge. Stocks on Wall Street were also under pressure after their recent rally, following mixed earnings reports. The Dow Jones Industrial Average was recently down 34 points at 10,262, while the S&P 500 Index fell 7 points to 1,096. Gold for April delivery fell $6, or 0.5%, to finish at $1,112 an ounce at the New York Mercantile Exchange.

On Tuesday, gold futures gained 1.2% after upbeat reports from the U.S. housing sector. On Monday, the precious metal rose more than 2% following strong manufacturing reports from the U.S., Europe and China. "Gold's recent rebound has to breach above the 8-week trend line resistance of $1130-25 in order for the rally to be sustainable," said Ashraf Laidi, chief market strategist at CMC Markets, in a note. But "prolonged U.S. data strength risks dragging gold back towards $1070, leaving the $1125-30 trend line intact." See full story.

February 2: Gold rises, caps biggest 2-day advance since November

Source: Bloomberg

New York -- Gold futures rose, capping the biggest two-day gain in almost three months, as the dollar’s rally stalled, boosting demand for precious metals as alternative investments. Silver and platinum also climbed. The greenback was down today against a basket of six major currencies. In 2009, gold climbed for the ninth consecutive year, reaching a record $1,227.50 an ounce on Dec. 3, as the dollar dropped 4.2 percent. “The dollar is a big driver of this rally,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “People want exposure to the metals. You’re seeing the big funds coming back to commodities and quietly buying on the dips.” Gold futures for April delivery rose $13, or 1.2 percent, to $1,118 an ounce on the Comex division of the New York Mercantile Exchange. Yesterday, the metal jumped 2 percent, bringing the two-day gain to 3.2 percent, the most since early November.

The dollar slumped last year amid record-low interest rates and a surge in government spending to pull the economy out of recession. The metal tumbled in December and January as the greenback rebounded. Central banks may increase holdings of gold in reserves, boosting prices, said Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter. “What we are seeing is gold taking on the mantle of the second most important reservable asset as the problems within the European Union force central banks to very seriously reconsider their notion” of holding dollars first, followed by euros and the precious metal, Gartman said in a report. See full story.

February 1: Gold rises most in 4 weeks as dollar rally stalls

Source: Bloomberg

New York -- Gold prices rose the most in four weeks on speculation that the dollar’s rally will stall, boosting demand for the metal as an alternative investment. The greenback fell from a six-month high against the euro, shedding as much as 0.5 percent. Gold fell 1.1 percent in January as the dollar rallied 3.4 percent. “The dollar is losing its mojo today,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. “The gold bulls are coming back after last month’s bloodshed.” Gold futures for April delivery rose $21.20, or 2 percent, to $1,105 an ounce on the Comex division of the New York Mercantile Exchange, the biggest gain for the most-active contract since Jan. 4. The metal dropped 0.5 percent last week.

Gold advanced 24 percent last year as the Federal Reserve held interest rates close to zero percent to revive the economy. Futures climbed to a record $1,227.50 on Dec. 3. President Barack Obama today sent Congress a $3.8 trillion budget that puts an emphasis on job creation, including $100 billion in additional stimulus spending. The deficit in the year starting Oct. 1 is projected at $1.3 trillion. “Those budget numbers have people freaked out,” Zeman said. “We continue to print money with reckless abandon, so that’s why people are buying up hard assets like gold and oil.” See full story.

January 29: Gold retreats as dollar rallies on back of stronger U.S. data

Source: Marketwatch

New York -- Gold futures fell slightly on Friday, as the dollar rallied on the back of strong U.S. economic-growth and consumer-sentiment reports, reducing the value of the precious metal as a hedge against weak currencies. "The strong dollar has been the primary catalyst for the sell-off in gold," said Bill O'Neill, managing partner at Logic Investment Services.

The dollar rallied after the government reported that gross domestic product grew at the fastest pace in six years in the fourth quarter. A stronger dollar has tended to pressure gold and commodities. Gold for April delivery finished down $1, or 0.1%, at $1,083.80 an ounce at the New York Mercantile Exchange. The precious metal fell 0.6% over the past week, and lost 1.2% in January. Also lifting the dollar, the euro came under continued pressure on worries about Greece's handling of its debt, according to RBC Wealth Management. Over the past year, investors have used the safety of the cheap dollar, which can be borrowed at near zero interest rates. See full story.

January 28: Gold drops as commodities, stocks slump

Source: Marketwatch

New York -- Gold futures finished slightly lower on Thursday, tracking Wall Street stocks' and commodities' broad move down on the back of mixed tech earnings and economic reports. March gold futures finished down 90 cents at $1,084.80 an ounce at the New York Mercantile Exchange. The precious metal rose as high as $1,096.90 an ounce earlier in the session, receiving a boost from President Barack Obama's State of the Union address, which focused on job creation.

"Obama had some soothing words about the economy and banks," said Mark O'Byrne, executive director at GoldCore. Equity markets and gold first rose in unison, he said. Speaking to the nation and members of Congress in a high-stakes policy address, Obama late Wednesday called for new job-creation measures and tax breaks, and he curbed his attacks on banks somewhat. See full story.

January 27: Gold futures drop on worries over China, higher dollar

Source: Marketwatch

New York -- Gold and other metals futures closed lower Wednesday, weighed by lingering concerns that Chinese moves to slow its economic growth would lessen demand for a range of natural resources. Gold for February delivery dropped $13.80, or 1.3%, to $1,084.50 an ounce at the close by the close of floor trading on the New York Mercantile Exchange. The April contract also fell $13.80, or 1.3%, to $1,085.70 an ounce.

After the Federal Reserve's statement on U.S. monetary policy, gold traded electronically stuck near its floor trading close. The central bank, as expected, kept its federal-funds rate unchanged on Wednesday and said it would keep them exceptionally low for "for an extended period." Gold futures were more influenced by Chinese lending fears. "The gold market is still being hurt by indications of slightly tighter monetary policy in China," said James Steel, gold analyst at HSBC in New York. "This year Chinese monetary changes seem to be gaining an influence in gold. We're not only looking at the Fed as we used to." See full story.

January 26: Gold rises while most metals slump as growth concerns return

Source: Marketwatch

New York -- Most metals finished lower on Tuesday, as fresh moves by China to curb lending fueled concerns over lower demand from the world's fastest growing economy, sent investors fleeing to the safety of the dollar, reducing the relative value of hard assets. Gold futures, however, traded higher as investors took fresh positions in the April contract and tracked gains in stocks on Wall Street, which rebounded after a report showed consumer sentiment improved in January.

"Base metals [fell] after China implemented a clampdown on lending," the metals team at Royal Bank of Canada said in a note. Among other metals, copper for March delivery fell 5.3 cents, or 1.6%, to $3.34 a pound. China's central bank singled out several large Chinese banks and required them to raise their reserve ratios for excessive lending, while also asking some not to issue new loans, according to reports Tuesday. That suggested the government is taking steps to cool the red-hot pace of the nation's loan growth. See full story.