Gold remains in a three month downtrend as we head into a week highlighted by a Federal Reserve policy meeting later this week. The yellow metal has been under pressure in the last several months, primarily due to a remarkably strong U.S. dollar that will be the leading factor as the Fed offers clues regarding domestic interest rate policy for the coming months.

Overall improvements in the U.S. economy and strength in the domestic labor market would most likely lead to a rise in interest rates over the summer as the Fed attempts to cool down the heated U.S. economy.

As of this writing, gold is up by $5 an ounce to $1157, a continuation of the short covering experienced on Friday as the market continues to digest part of the overall price decline since the January highs. The support level for gold remains at $1143 per ounce, with resistance at $1191.  Gold buyers look to a move above that level for confirmation that a medium term low has been established.

Silver is slightly higher this morning at $15.60 an ounce as it benefits as well from a moderate bout of short covering. Signs point to silver remaining relatively neutral in the short term, with $14.70 as the support level. Resistance for silver prices remains at the $16.20 level as we wait to see how the precious metals respond to the Fed comments later this week.