Daily Gold Update

Source: Marketwatch

San Francisco— Gold futures lost more than $26 an ounce Friday to mark their weakest closing level in almost eight weeks, as easing concerns over the euro and China�s hike in reserve requirements helped dull interest in the precious metal, but analysts remained upbeat about gold�s overall prospects. The decline in prices came as �the Portuguese, Spanish and Italian government bond sales succeeded, supported by Chinese, Japanese as well as European Central Bank buying that captured the money needed to survive a little longer,� said Julian Phillips, editor at GoldForecaster.com. �Gold fell by way of relief that the euro was not going to collapse,� he wrote in emailed comments. Gold for February delivery fell $26.50, or 1.9%, to settle at $1,360.50 an ounce on the Comex division of the New York Mercantile Exchange, the lowest closing level since Nov. 22. The 1.9% drop is the biggest single-day drop since Jan. 4�s $44.10 slide.

�This weakness could last a little longer as the relief works its way through,� said Phillips. However, the euro zone�s sovereign-debt problem �has not been changed by this,� he added. �A change in debt levels needs to happen, plus a jump in the cash flow to nations that are in debt-distress.� At the same time, Asian demand continues to blunt selling pressures. The Chinese New Year, beginning early next month, is �prompting a jump in Chinese gold buying; we do not expect a heavy fall in the gold price,� he said. See full story.