NEW YORK (TheStreet ) -- Gold prices were climbing modestly higher after the Bank of England pumped more money into the system.

Gold for April delivery was up $4.10 at $1,735.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,742.10 and as low as $1,728.30 an ounce while the spot price was adding $4, according to Kitco's gold index.

Silver prices were 24 cents higher at $33.94 an ounce while the U.S. dollar index was flat at $78.68.

The Bank of England added to its quantitative easing program by 50 billion pounds bringing the total to 325 billion pounds. The central bank left interested rates unchanged at 0.5% while the European Central Bank left its rate at 1%. Gold prices rose slowly after the news, but many experts had been expecting a bigger pop in the price with central banks unabashedly pumping money into the system.

"The reality is is that it's all about the euro," says Phil Streible, senior commodities broker at RJO Futures. "With the fragile state all of Europe is in right now, any sign of quantitative easing, or QE, is probably too little at this point ... more types of stimulus plans means more spending cuts are soon to follow." More stimulus can trigger a rush into gold as a hard asset, an alternative to the paper currency being devalued, but austerity measures bring in the deflation worry, where gold tends to selloff initially.

Streible says the real issue now is how does the euro react, and therefore gold, if Greece is unable to secure a debt deal, if its Parliament is unable to agree on austerity measures, if the European Central Bank doesn't take a loss on its Greek bonds, and if the troika - International Monetary Fund, European Central Bank and European Union - withhold the 130 billion euro second bailout.

On the one hand, the euro could rally, "it's like trimming the cancer off," says Streible, and would most likely support gold. Although if risk appetite returns in full force, gold might be forgotten as a safe haven asset. If Greece leaves the euro and all hell breaks loose and the euro plummets, gold could sink along with it at least in the short term.

Source: http://www.thestreet.com/story/11410010/1/gold-prices-gain-on-central-bank-easing.html