Gold inches up; silver falls on margin rise

The shiny metal ticked up on Thursday trading as the dollar showed weakness ahead of rate decisions by key European central banks.

The previous session, gold shed $20.60 or 1.34% after closing at $1516.05, while gold price was setin London at $1541.00 per ounce inclining from $1536.00 during the AM fixing.

Spot gold is trading at $1518.00 an ounce after recording a high of $1521.87 and a low of $1514.27.

The dollar dropped ahead of the ECB and BoE rate decisions to trade near the lowest level in 17 months against the euro. The dollar index, which tracks the dollar movements versus a basket of major currencies, pared its two day advance to fall to a low of 72.80 compared with the day's opening of 73.12.

Crude oil also took advantage of the dollar's drop to rebound to $109.00 a barrel from the day's opening of $108.76.

Both ECB and BoE are expected to hold their monetary stance unchanged in May which may help the dollar to continue its attempt to rebound after the hawkish move from the ECB in April had pushed the euro higher.

Last month, the ECB raised interest rate by 25 basis points to 1.25% to halt inflation that reached 2.8% in April, according to CPI flash estimate, yet ECB Vice President said this week that the ECB is not in rush to continue tightening, where Trichet referred previously that inflation is still not in risky levels.

Later in the day, the US will release initial jobless claims for the week ending April 30, which is set to show a decline in the number of people seeking jobless benefits to 410,000 compared with 429,000 a week before, according to median projections, ahead of the awaited jobs report on Friday.

On the other hand, silver fell to one-month low after the fourth rise by the CME group on COMEX silver futures margins that will be effective today and next Monday which increased the cost of trading silver.

Among other precious metals, platinum inched down to $1819.50 from the day's opening of $1821.00, palladium plunged to $739.20 from $745.20 and silver plummeted to $38.70 from $39.26, as of 07:55 GMT.