Gold Prices Slightly Higher Ahead of Fed Meeting (Update 1)

Updated from 10:29 a.m. EDT with settlement prices

NEW YORK (TheStreet) -- Gold prices traded slightly higher Monday ahead of the Federal Reserve's two-day meeting, with an announcement on interest rates expected Wednesday.

Gold for December delivery added $2.30 to settle at $1,726.30 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,730.30 and as low as $1,714.40 an ounce, while the spot price was up $5.90, according to Kitco's gold index.

"Wait and see prevails as [a] two-day Fed meeting starts tomorrow," George Gero, precious metals strategist at RBC Wealth Management, wrote in a note. "Traders carefully looking at headlines looking for inflationary signs and reexamining sell stops and buy stops."

Silver prices for December delivery gained 16 cents to close at $32.25 an ounce, while the U.S. dollar index was up 0.01% to $79.64.

Questions continued to surround the possibility of a Spanish bank bailout, but reports suggested a formal request could be near after Spain's Prime Minister Mariano Rajoy won a regional election race. European officials and analysts had said Rajoy wanted to delay a bailout request until after the results of the regional elections, according to Reuters.

The Fed meeting will provide an update to progress made since the central bank announced an open-ended, mortgage-backed securities purchasing program in September. The so-called quantitative easing is an inflationary policy that has left many analysts to forecast a steady rise in gold prices well into next year.

The Fed previously said that the open-ended program would end after a prolonged strengthening in the labor market and overall economic conditions.

Gold mining stocks were mostly higher Monday. Shares of Agnico-Eagle Mines (AEM) and Randgold Resources (GOLD)were rising 1.2%.

Among other mining stocks, Kinross Gold (KGC) was losing 0.30%, and Barrick Gold (ABX) was increasing 0.56%.

Gold ETF SPDR Gold Trust (GLD) shares were climbing 0.19%.

-- Written by Joe Deaux in New York.

>Contact by Email.

Follow @JoeDeaux