NEW YORK (

TheStreet

) --

Gold

and

silver prices

were falling Wednesday as investors digested Ben Bernanke's commitment to low interest rates but no additional stimulus.

Gold for August delivery was down $7 to $1,537 at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,547.40 and as low as $1,531.80 while the spot gold price was shedding more than $10, according to Kitco's gold index.

Silver prices were slipping 72 cents to $36.32 an ounce while the U.S. dollar index was adding 0.40% to $73.84.

Federal Reserve

chairman Ben Bernanke appeared to take the prospect of more stimulus, or a third round of quantitative easing, off the table Tuesday when he spoke at the International Monetary Conference in Atlanta. Bernanke acknowledged that slower economic growth is painful, but that recovery could pick up steam in the second half of the year.

Bernanke gave no hints of tightening, but said that "accommodative monetary policies are still needed ... Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established."

Bernanke's speech was a mixed bag for gold prices. On the one hand the promise of low rates for an extended period of time means that inflation will continue to outpace interest rates, a positive for gold prices. On the other hand, no more stimulus helps the U.S. dollar while curbing inflation worries and demand for gold as a safe haven asset.

Mark O'Byrne, executive director of Goldcore, a bullion dealer, sees more consolidation for gold and silver prices but that "some form of QE3 looks likely, but at the same time Ben Bernanke has to be very careful of how he manages perceptions."

Tony Battista, managing director of TastyTrade, argues that gold really isn't the safe haven play investors are used to. "If I had to pick one of the two, although gold is higher...I would rather be short gold and long silver," says Battista. "Silver has been beaten up so much more than gold." Battista says the upside to gold is only $1,600 but the risk is $1,400, which he sees as fair value.

All markets are generally lower Wednesday, so gold could also be suffering from profit taking as well as the buy the rumor, sell the news problem. Gold had rallied modestly this week and last but sold off into Ben Bernanke's speech and are extending those losses.

Mihir Dange, trader at Arbitrage, is shorting gold from this level until $1,577, gold's intra-day record, "and if we get above $1,577

I would reinitiate longs."

Gold mining stocks

closed mostly lower Tuesday.

Barrick Gold

(ABX)

was down 0.35% at $45.33 while

Newmont Mining

(NEM) - Get Report

lost 0.94% to $52.94. Other gold stocks,

Goldcorp

(GG)

and

AngloGold Ashanti

(AU) - Get Report

closed at $47.99 and $43.87, respectively.

--

Written by Alix Steel in

New York.

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Alix Steel

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