Isra-Mart srl: PRECIOUS METALS: Hopes Of EU Bank Plan Lift Gold, Silver

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Gold and silver pressed higher on a weaker dollar and hopes of a European bank recapitalization plan.

The most actively traded gold contract, for December delivery, was recently up $24.30, or 1.5%, at $1,685.30 a troy ounce on the Comex division of the New York Mercantile Exchange.

October-delivery gold was $28.90, or 1.7%, higher at $1,688.60 a troy ounce.

Silver for December delivery, the most actively traded contract, was up 71.2 cents, or 2.2%, at $32.710 a troy ounce.

European Commission President Jose Manuel Barroso is expected to unveil a comprehensive plan to recapitalize Europe's troubled banks later Wednesday. The health of the European financial system, and its exposure to the region's sovereign debt problems, has been a dominant concern for market participants in recent weeks. Some investors chose to exit the precious metals market and move to cash amid worries that a euro zone member's default will trigger a global financial crisis.

The dollar fell to a three-week low against the euro as hopes of a bank plan boosted bets on the euro. Gold and silver futures, which are denominated in dollars, benefited from the exchange rate shift as the contracts seem cheaper to buyers holding foreign currencies when the greenback eases.

The ICE Dollar Index was recently at 77.010, down from 77.669 late Tuesday in New York.

Meanwhile, Slovakia, which failed to pass legislation on the expansion of the European bailout fund Tuesday, has scheduled a second vote on the issue for later Wednesday and now is likely to approve the measures. Slovakia is the last of the 17-member currency union to vote on boosting the European Financial Stability Facility.

"We don't foresee this as a real threat to the eventual implementation of the EFSF, but just another delay," Standard Bank precious metals analyst Marc Ground wrote in a note to clients.