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Gold, Silver Prices Rise on Bank Rates

NEW YORK ( TheStreet ) - Gold and silver prices were moving higher, after the market received news that the European Central Bank would keep interest rates on hold.

Gold for August delivery inched up $1.50 to $1,549 at the Comex division of the New York Mercantile Exchange. Silver prices for July were adding 61 cents to $37.23 an ounce while the U.S. dollar index was adding 0.3% to $74.13.

ECB President Jean-Claude Trichet signaled that while the refinancing rate would be kept at 1.25%, the ECB would give "strong vigilance" to the risks, suggesting that the markets might see a rate rise in one month.

Federal Reserve chairman Ben Bernanke's recent speech in Atlanta has been a mixed bag for gold prices. Gold rallied modestly this week and the last but sold off during Bernanke's outlook for the economy on Tuesday.

The chairman's commitment to low interest rates for an extended period is a positive for gold prices as inflation is on track to outpace interest rates. However, lack of additional federal stimulus can lead to worries about growing inflation, favoring demand for gold as a safe haven asset.

Base metals on the Shanghai Futures Exchanges were mixed overnight. "Investors stayed on the sidelines amid uncertainty over macroeconomic conditions and ahead of China's next set of month data releases," according to a RBC Capital Markets report.

Barrick Gold (ABX - Get Report) is down 0.20% at $44.24 while Newmont Mining (NEM) is up 0.1% at $52.19. Other gold stocks, Goldcorp (GG - Get Report) and AngloGold Ashanti (AU - Get Report) are down 0.23% and up 0.53%, respectively.

More on Gold
Gold Price News
How to Invest in Gold

-- Written by Chao Deng in New York.

>To contact the writer of this article, click here: Chao Deng.

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