Gold and silver prices move higher for the day as a result of the European Central Bank holding the interest rates, just as they were expected to by many. However, ECB President said that they might see a rate rise next month.
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.
--Written by Chao Deng in New York.
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