Gold Prices Rally Ahead of Fed Announcement

The Street, Alix Steel

Gold and silver prices were rallying Wednesday ahead of the Federal Reserve's interest rate announcement and Ben Bernanke's press conference.

Gold for August delivery was adding $7.80 to $1,554.20 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,559.20 and as low as $1,542 while the spot gold price was adding $8.40, according to Kitco's gold index.

Silver prices were adding $0.13 to $36.51 an ounce while the U.S. dollar index was flat at $74.63 and the euro was slightly higher.

Gold prices were breaking through the $1,550 an ounce area, signaling a breakout to some traders. "Right now we are in a range $1,510 to $1,550," says Mihir Dange, founder and trader at Arbitrage, but "it seem like there is going to be a big move coming up."

Gold prices didn't do much after Greece's Prime Minister George Papandreou received a vote of confidence from his government late Tuesday, which paves the way for billions in austerity measures needed to secure more bailout money. It seems gold prices are instead taking direction from the Fed's upcoming interest rate announcement and Ben Bernanke's second press conference.

Gold has been clawing its way back to the $1,550 area as investors opt for the perceived safety of the U.S. dollar and gold versus riskier stocks and currencies like the euro. "The trend now in gold is a steady grind higher," says Dange, who would get long gold once prices break and hold its record close of $1,557 an ounce.