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Gold Barely Budges Despite Wild Stock Market

Gold prices inched lower Tuesday amid hopes that the worst is over for U.S. stocks.

After whipping wildly in a 1000-pt range, the Dow Jones Industrial Average has been in positive territory since lunchtime.

February gold finished $7, or 0.5%. lower at $1,329.50/oz. Gold has seen little movement despite yesterday's historic losses on Wall Street.

That's because the fundamentals for the U.S. economy remain good, and the Federal Reserve is expected to raise interest rates in March.

Also, gold lost some of its appeal as a hedge against inflation based on remarks from St. Louis Fed President James Bullard.

"I caution against interpreting good news from labor markets as translating directly into higher inflation," Bullard said.

"The empirical relationship between these variables [wages and inflation] has broken down in recent years and may be close to zero," he added.

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