Daily Gold Update

Source: Marketwatch

San Francisco— Gold futures fell to three-month lows on Thursday as Europe�s top central banker said the central banks of the United States, European Union and Britain are united against inflation. Gold for February delivery declined $14.10, or 1.1%, to $1,318.60 an ounce on the Comex division of the New York Mercantile Exchange. A close around these levels would be the lowest for gold since Oct. 4, when the metal settled at $1,316.80 an ounce. Gold investors, perceiving the key central bankers to be �on top of inflation,� could be selling in anticipation of lessened inflation worries, said Tom Pawlicki, a precious metals analyst with MF Global in Chicago.

At the World Economic Forum�s annual meeting in Davos, Jean-Claude Trichet, the president of the European Central Bank, said major central banks �are very united in purpose to maintain price stability� and anchor inflation expectations. Gold had wavered between small gains and losses earlier in the session, but seemed to regain enough footing to spend most of the morning in the black. Losses for gold puzzled market observers because the stars seemed to be aligned for a rise on Thursday. Macroeconomic data painted a doubtful picture of the jobs market and durable good orders, and the dollar came off highs versus major rivals. But inflation touches a deep nerve in the gold market, as the metal is often seen as the ultimate storer of wealth and it stands to benefit from unbridled price increases. See full story.