Gold, Silver Prices Rise Ahead of Fed Comments

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"Gold and silver don't always react inversely to the dollar, but today they will."

Gold and silver prices were slightly higher Wednesday as markets awaited the Federal Reserve's rate decision and Ben Bernanke's first press conference.

Gold prices for June were adding $2.70 to $1,506.80 an ounce at the Comex division of the New York Mercantile Exchange. Gold prices have stayed in a tight range from $1,504 to $1,503 an ounce, while the spot gold price was flat, according to Kitco's gold index. The U.S. dollar index was moving slightly higher at $73.77.

Silver prices were adding $0.14 to $45.19 an ounce.

The Fed will make or break the commodities today with its interest rate policy decision expected at 12:30 p.m. EST and Ben Bernanke answering press questions at 2:15. No change in policy is expected but the language is the key.

Will inflation be longer term leading to a sooner-than-expected rate hike and how will the Fed exit quantitative easing round two in June? Will it be a hard landing or will its balance sheet stay the same keeping a lot of money in the system. The Fed has pumped more than $2 trillion since the start of its cheap and easy monetary policy.

A loose money policy winds up hurting the dollar as more greenbacks in circulation make them worth less, lifting gold and silver as a perceived safer form of money. Gold and silver don't always react inversely to the dollar, but today they will.

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