GOLD PRICE NEWS - The gold price rose heading into the open, rising $4.85 to $1,110.67 per ounce, as a slightly weaker dollar supported the price of gold. After its best day in over a week, the gold price looked to continue its climb. The U.S. dollar retreated 0.3% against the euro currency as credit default swaps on Greece’s debt fell for the first time this week.

Despite yesterday’s gains, however, the gold price has remained range-bound between $1,090 and $1,120 per ounce for the past 12 trading sessions. Over the same time frame, the CBOE Gold Volatility Index has declined 14.2%, as gold bulls and bears jockey for position betting on the next move in the price of gold.

Yesterday’s gold price advance was largely driven by an unconfirmed report from Russian news agency Finmarket that China was planning to buy the remaining 191.3 of the 400 metric tons of gold the International Monetary Fund (IMF) put up for sale in 2009. Upon release of the news, the gold price surged from near $1,090 to $1,105 per ounce, while gold stocks followed the price of gold higher. However, at this point, neither China nor the IMF has released a response to the Russian report.

The schedule of economic data is filled with several reports this morning - the first being fourth quarter U.S. Gross Domestic Product (GDP). According to the Commerce Department, GDP expanded at a 5.9% annual rate - higher than the 5.7% median estimate from a Bloomberg News survey of 76 economists. While the GDP was better than market expectations, it is important to note that inventory restocking accounted for 3.5 percentage points of the 5.9% gain. Government-induced fiscal stimulus measures also played a meaningful role in the GDP growth. Going forward, these two factors are likely to dissipate, dampening expectations for similar GDP growth in 2010.

The gold price extended its gains after the release of the GDP report, while the dollar continued its decline against the euro. Later this morning the release of three additional economic reports could provide a catalyst for the currency markets and the gold price - Chicago Purchasing Managers’ Index (PMI), University of Michigan Consumer Sentiment, and existing home sales.