Gold Prices High as ECB Keep Interest Rate

Gold prices hit a one-month high on COMEX as the euro held on to its early gains against the dollar after the European Central Bank (ECB) kept interest rates unchanged, and as other assets seen as higher risk, such as stocks and commodities, rallied.

As of 12:04 a.m. EDT, August gold was $23.60, or 1.5%, stronger at $1,640.50. July silver was up $1.325, or 4.7%, to $29.73 an ounce. August gold hit a high of $1,642.40 that was its strongest level since May 7, while July silver hit a $29.815 high that was its most muscular level since May 8.

The yellow metal is building on a rally sparked on Friday by weak US payrolls data, which reignited talk of a fresh round of monetary easing from the Federal Reserve. That helped it rebound from the 2012 low it hit in May during four months of losses.

According to Frank Lesh, analyst with FuturePath Trading, “Risk is back on. Markets have been bolstered by ideas that the Federal Reserve and European Central Bank may undertake further accommodative policies. Light buy stops may have been elected in August gold as it moved up through last week’s $1,632 an ounce high.”

He puts chart resistance for August gold in the $1,650s, then the 100-day moving average around $1,670. He lists resistance for July silver from $30 to $30.40.