Gold Edges Up Ahead of Fed Meeting (Update 1)

Updated from 10:01 a.m. EDT with settlement prices

NEW YORK ( TheStreet) -- Gold prices edged up Monday as traders engaged in light buying ahead of the Federal Reserve's two-day meeting this week.

Gold for August delivery rose $1.70 to settle at $1619.70 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1625.80 and as low as $1613.10 an ounce, while the spot price was up 30 cents, according to Kitco's gold index.

"It's driven by anticipation of stimulus," said George Gero, precious metals strategist at RBC Wealth Management. "Traders are going to step back and see which way the wind blows."

Silver prices for September delivery rose about 54 cents to $28.03 an ounce, while the U.S. dollar index was climbing 0.25% to $82.82.

Gold jumped some 2.5% last week following media reports that sentiment had increased among Fed members for additional quantitative easing in light of stagnant economic conditions. The pledge of European Central Bank President Mario Draghi to do "whatever it takes" to keep the single-currency bloc intact also helped.

This week is packed with market-moving events that could shove gold decidedly in one direction. In addition to the Fed meeting, there is a first notice day, when traders have to make or take gold delivery; the European manufacturing index; an ECB monetary policy announcement and U.S. monthly labor data. Hanging in the wings, according to Gero, is the possibility of more easing from China as well.

On Monday, however, summer doldrums and dollar fluctuation kept gains in check on Monday.

Gold mining stocks were mostly higher Monday. Eldorado Gold ( EGO) was at $11.38, up 36 cents, or 3.3%, while Randgold Resources ( GOLD) moved to $91.99, up 64 cents, or 0.7%.

Among other mining stocks, Agnico-Eagle Mines ( AEM) and Barrick Gold ( ABX) were up 2.7% and 2.1%, respectively. Newmont Mining ( NEM) was rising 1.5%.

-- Written by Joe Deaux in New York.

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