Gold prices lose further ground as stocks rally

Gold fell for the second day in a row Tuesday as investors flooded back into the stock market, roused by Federal Reserve Chairman Ben Bernanke's remarks that the recession could end this year and that regulators aren't planning to nationalize banks.

Other commodities, including energy and agriculture futures, rallied along with Wall Street.

Most commodities, with the exception of gold, have taken a beating this year due to investors' unrelenting concerns about the eroding economy. Prices for raw materials including corn, wheat and copper have moved largely in tandem with the stock market.

On Tuesday, stocks rebounded after days of heavy selling that left the major indexes down near 12-year lows. The Dow Jones industrial average ended up 236.16 or 3.32 percent at 7,350.94.

Bernanke, in remarks to Congress, predicted the economy is likely to keep contracting in the first six months of 2009, but that "there is a reasonable prospect" the recession will end this year.

As bargain-hunting traders moved back into equities, gold prices suffered. Investors often use gold as a safety net in times of market turmoil.

Going in to Tuesday's session, gold prices were up 12.5 percent for the year, and had logged a 5.6 percent increase in just five sessions. Prices are still up about 10 percent in 2009.

Gold for April delivery fell $25.50 to settle at $969.50 an ounce on the New York Mercantile Exchange.

Other metals were mixed. March silver dropped 45.5 cents to $13.9950 an ounce, while May copper futures rose 4.9 cents to $1.50 a pound.

The dollar was mixed against other major currencies. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.80 percent from 2.76 percent late Monday.

Energy prices benefited from the gains in the stock market. Light, sweet crude for April delivery rose $1.52 to close at $39.96 a barrel.

Gasoline futures rose 3.26 cents to $1.076 a gallon, while heating oil rose 3.35 cents to $1.2089 a gallon.

Grain prices moved higher on the Chicago Board of Trade.

May wheat futures gained 4.75 cents to $5.2625 a bushel, while corn for May delivery rose 2.25 cents to $3.63 a bushel.

May soybeans added 7.5 cents to $8.8350 a bushel.

http://www.iht.com/articles/ap/2009/02/24/business/NA-US-Commodities-Review.php