The bump in the ECB's refi rate to 4.25% was widely anticipated and Trichet was expected to maintain a firm inflation-fighting stance at the follow-on press conference. The euro rose to a new 2-month high above 1.5900 in anticipation.

However, Mr. Trichet's comments at the press conference had a more neutral tone than many were expecting. He implied that after today's 25bp rate hike; monetary policy contributes to achieving the goals of preserving purchasing power and anchoring expectations.

The ECB chief did not go so far as to say that rates are now appropriate, adding that the bank would continue to monitor developments very closely. This leaves the door open for further rate hikes down the road, but the less than convincing tone prompted a round of profit taking in the euro.

The EUR-USD rate tumbled back below 1.5800 as traders who had been betting on a more hawkish ECB tone squared positions ahead of the long holiday weekend in the US. The resulting firmer tone in the dollar had a negative impact on gold.

We'll see if the hawkish Mr. Trichet returns in the weeks ahead if upside price risks persist, as they are likely to do. It won't take much to get the euro back on track for a short-term retest of the 1.6020 all-time high from Apr, which would have gold moving higher again as well.

Gold's retreat into the range leaves important chart/Fibonacci resistance at 954.70/960.88 intact for the time being. However, good buying interest is likely to be seen on dips ahead of the pivotal 900.00 level.

As the long-term uptrend in the yellow metal continues to re-exert itself, an eventual push above 960.88 would lend considerable credence to the scenario that calls for renewed probes above $1,000.

Oil prices set another new record high today, which is going to continue to be supportive to the gold market as well. As energy prices continue to rise so do the price risks for a wide array of goods and services. This is just the scenario that may prompt the ECB to hike rates again down the road.

Since gold is the classic hedge against inflation, we look for the yellow metal to remain underpinned by 'unanchored' expectations with respect to inflation.

US nonfarm payrolls fell 62k in June, versus a revised -62k in May. The unemployment rate held steady at 5.5%. The number of jobs lost exceeded market expectations and marks the sixth consecutive monthly decline.

The weak employment outlook, combined with the latest drop in the US ISM nonmanufacturing index, clearly shows that the US economy remains on the ropes.

Not a real 'feel good' as we look forward to the long Independence Day weekend. However, the prudent investor can turn to gold as means to preserve wealth in these turbulent economic times.

Physical gold offers a convenient and liquid hedge against inflation, a declining dollar, as well as general economic and geopolitical uncertainty.

Physical gold also offers non-correlated diversification against the more traditional asset classes.

On Monday we will release our annual Survey of Investments. One look at the chart that will accompany this report will clearly illustrate which asset classes continues to shine above all others.

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Gold Market Movers:

US nonfarm payrolls for Jun -62k, versus downwardly revised -62k in May. Unemployment rate steady at 5.5%.

US jobless claims for the week ended 28-Jun +16k to 404k, well above market expectations.

ECB hikes refi rate by 25bp to 4.25%.

Eurozone retail sales for May +1.2%.

UK services PMI for Jun fell to 47.1, below market expectations.

Riksbank raises rates by 25bp.

Dow in secular bear market when priced in ounces of gold

Payrolls fall by 62,000 in June

Oil touches new high above $146