Updated from 10:24 a.m. EDT, with settlement prices

NEW YORK ( TheStreet) -- Gold prices dropped Thursday after the European Central Bank reduced interest rates to a record low.

Gold for August delivery settled down $12.40 to $1,605.50 an ounce on the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,624.50 and as low as $1,597.50 an ounce, while the spot price was falling $8.60, according to Kitco's gold index.

"The ECB cuts interest rates down to zero, we saw a credible amount of dollar shrank -- that initially started to put some pressure on gold -- then you had follow through once we had ADP payroll come out it was a little bit stronger than what they were looking for," said Phil Streible, senior commodities broker at RJO Futures.

Silver prices for September delivery settled down about 61 cents to $27.67 an ounce, while the U.S. dollar index was jumping 0.74% to $82.80.

The better-than-expected ADP report signaled to investors that Friday's jobs report for June could offer an upside surprise, which would prompt them to flee the yellow metal.

The Federal Reserve has repeated its commitment to possible quantitative easing if the United States' jobs situation continues to weaken. So-called QE3 would likely give gold prices a significant bump.

"It gold has pulled back to $1,600 -- $1,600 is good key-level support, it should hold right in this area and move back up a little bit," said Streible. "We're still going to trade around this range, I still think $1,650 is the top, $1,550 is the bottom -- it's just the same thing over and over."

The majority of gold mining stocks were slightly negative during the trading session. Eldorado Gold ( EGO) was at $12.52, down 42 cents, or 3.3%, while Barrick Gold ( ABX) was at $38.02, down 69 cents, or 1.8%.

Shares of Kinross Gold ( KGC) and Newmont Mining ( NEM) were down more than 1%.

-- Written by Joe Deaux in New York.

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