Gold prices pulled off a moderate advance Thursday, but other commodities slumped for a second straight day as a profit warning from Wal-Mart Stores Inc. amplified investors' concerns about waning demand for products of all kinds. The nation's largest retailer slashed its projection for fiscal fourth-quarter earnings and said December sales at stores open for at least a year rose by a worse-than-expected 1.2 percent. The announcement, which came as a stream of retailers reported weak December sales, proved that even discounters are suffering amid the recession, and underscored just how much consumers have cut back their spending. Increasingly disappointing economic news has investors worried about falling demand for commodities and raw materials in general, which keeps sending prices lower. Also Thursday, the Labor Department said the number of people continuing to file claims for jobless benefits rose to a new 26-year high. Investors are bracing for the government's employment report on Friday, expected to show another big jobs loss for December. "All of these commodities are being snuffed out by all the poor macroeconomic news," said Edward Meir, senior commodities analyst at MF Global in New York. "It's just spreading worldwide." Gold prices, however, advanced as the dollar weakened against other major currencies, including the euro and the British pound, even after the Bank of England cut its official interest rate to 1.5 percent - the lowest level in its 315-year history. Lower interest rates can spur economic activity, but have a tendency to weaken currencies. Some analysts believe interest rate cuts in other countries could give the greenback a boost. But the Federal Reserve also has plans to keep interest rates in the U.S. low for some time. Last month, the Fed slashed its key rate to a record-low range of zero to 0.25 percent. Additionally, the Fed has essentially created more money to bulk up its balance sheet for additional lending - an effort to spur the economy at the risk of encouraging inflation over the long-term. Gold, more so than other commodities, is sensitive to the direction of currencies, as it is often used as a hedge against inflation and a weak dollar itself. Considered a safe-haven investment, gold also tends to benefit in times of economic uncertainty, and so prices have been cushioned from some of the fears about falling prices that are hurting other commodities. "Gold is in a different league right now," Meir said. "People are buying gold because they are concerned by these big (government) spending programs." Gold for February delivery rose $12.80 to settle at $854.50 an ounce on the New York Mercantile Exchange. Other precious metals prices slipped. March silver fell 0.8 cent to $11.0970 an ounce, while March copper futures fell 3.25 cents to $1.4790 a pound. Energy prices suffered on the Nymex following an inventory report that signaled further erosion in energy demand. According to a report from the U.S. Energy Information Administration, inventories held in underground storage in the lower 48 states fell less than expected last week. Light, sweet crude for February delivery fell 93 cents to settle at $41.70 a barrel. In other Nymex trading, gasoline futures rose 1.18 cents to settle at $1.0882 a gallon, while heating oil fell 2.35 cents to settle at $1.5196 a gallon. On Wall Street, stocks finished mostly higher as a deal to prevent more mortgage foreclosures helped pull the market up after an early sharp decline. Democratic lawmakers reached an agreement with Citigroup Inc. Thursday afternoon to let bankruptcy judges alter home loans in an effort to stave off foreclosures, and other lenders are expected to soon follow. The Dow Jones industrials lost 27 points to close at 8,742, but broader market indexes were higher. Meanwhile, the yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.45 percent from 2.50 percent late Wednesday. Grain prices slipped on the Chicago Board of Trade. March wheat futures shed 0.75 cent to $6.1250 a bushel, while corn for March delivery fell 9.75 cents to $4.0675 a bushel. March soybeans fell 0.5 cent to $9.8950 a bushel.

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