GOLD PRICE NEWS - The gold price rose $11 to $1,117 as weakness in the U.S. dollar buoyed the price of gold. With today’s gold price rally, the yellow metal closed February higher by $35 per ounce, for its first monthly advance since November 2009. By avoiding its third consecutive monthly decline, the gold price continued its streak of not closing lower for three straight months - a phenomenon that has not occurred since the beginning of the gold bull market in 2001.

Gold stocks followed the gold price higher, as the Market Vectors Gold Miners ETF (GDX) climbed $0.44 to $43.89. Gold stocks also rose for the first month in three, as the GDX posted a 7.7% gain in February. Strength in the gold stocks came amid positive earnings reports from a quarter that saw the gold price reach a new all-time high of $1,226.50 per ounce. Many of the world’s largest gold producers and top holdings in the GDX reported impressive gold production and profit figures this month, as they benefited from the rising gold price and improved economic environment.

The rally in the gold price, as well as in the broader commodity complex, came amid weakness in the U.S. dollar. The greenback traded lower this morning, and accelerated to the downside following this morning’s housing data, which showed sales of existing homes fell 7.2% to a seven-month low. The tepid housing recovery that began last fall has remained a concern for investors as well as policy makers.

Chairman Bernanke has repeatedly referenced housing as a barometer for the economic health of the U.S. economy and as a crucial component of the pace of monetary tightening. Today’s negative data point served to confirm the fact that the likelihood of higher interest rates in the near future is nil. This led to selling in the dollar and helped drive funds into gold bullion, gold ETFs, and gold stocks.

While the gold price faltered earlier in the week - breaking below the $1,100 level at one point - it regained momentum over the last two trading sessions. Federal Reserve Chairman Ben Bernanke reiterated to Congress this week that the central bank’s zero-rate monetary policy would continue “for an extended period of time.”

The gold price continued to further digest news from the previous week, including reports of significant bullion holdings by major investors, a surprise Fed discount rate hike, and continuing sovereign debt worries in Europe. Despite the uncertainty posed by these headlines, as March begins the gold price appears to be solidifying after a steep winter correction.