By Martin Essex Of DOW JONES NEWSWIRES LONDON (Dow Jones)--The dollar weakened against the euro in the European foreign exchanges Monday, helping the gold price hit a fresh record high, boosting copper and other base metal prices, and helping mining, energy and raw material stocks lift equity markets as a whole. Monday's moves were arguably prompted by Federal Reserve Bank of St. Louis President James Bullard, who told Dow Jones Newswires Sunday that he wants to see the Fed's buying of mortgage-backed securities maintained beyond the end of the first quarter of 2010. This contrasted with a statement by the European Central Bank Friday that it will tighten the standards according to which it accepts certain asset-backed securities as collateral for its refinancing tenders--a move seen as a first step towards the ECB's withdrawal from the stimulus measures it has used to support the banking sector during the global credit crisis. "Central bank rhetoric on exit strategies remains pivotal for price action across major asset classes. This was clearly illustrated overnight as Asian markets digested comments by the Fed's Bullard," said Kenneth Broux, markets economist at Lloyds Banking Group. Against this background, the dollar weakened, lifting the euro to $1.4975 by 1015 GMT, down from $1.4862 in late New York trading Friday and just off a $1.4991 high. That helped lift the gold price to $1166.70 per troy ounce, up $15.95 from New York, and just below a new high at $1167.65/oz. Among other commodities, copper and other base metals prices continued to climb Monday, defying underlying fundamentals as the unprecedented weight of investment money helped lift them to fresh 2009 highs. However, oil prices underperformed--only modestly higher due to the supply glut. In response, in the European stock markets the Dow Jones Stoxx 600 basic resources sector was more than 3% higher by 1025 GMT, helping the markets overall gain 1.4%. The futures markets suggested a higher open for New York stocks too, with no sign of the banking of year-end profits forecast by some analysts. "We commence the week strongly and once again bounce after a few days of declines, with clients reaping the rewards of buying into last week's dip," said Simon Denham at Capital Spreads. "Just when it looks like the market has got a little over stretched and a correction is expected to follow, the market maintains its momentum and heads higher again." -By Martin Essex, Dow Jones Newswires; +44-20-7842-9464; martin.essex@dowjones.com

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