NEW YORK (

TheStreet

) --

Silver prices

slipped with gold prices from recent highs on Tuesday as the market turned its focus to the start of a two-day

Federal Reserve

meeting.

Gold for June delivery slipped $5.60 to close at $1,503.50 an ounce at the Comex division of the New York Mercantile Exchange.

The gold price

has traded as low as $1,492 while the spot gold price was losing $6.40, according to Kitco's gold index.

Silver prices were still losing $2.16 to close at $44.98 an ounce -- a nearly 10% correction from recent highs while gold is dealing with a much smaller selloff, but both are no surprise to traders.

Vote: Where will gold prices finish in 2011?

Anthony Neglia, president of

Tower Trading

, said silver would hit $50 before $40 and the metal came close at $49.82 on the Comex. At that level Neglia said "it would be a good place to take profits, no need to take it all off the table

and then look for another buying opportunity maybe around $46 or so." Neglia is looking to see if silver can hold $44 as Ben Bernanke gives his first press conference Wednesday and is expecting multiple dollar price swings to become the norm. Once silver breaks $50, Neglia says the metal is in for a big rally.

Phil Streible, senior market strategist at

Lind-Waldock

, offers another technical way to protect yourself against a silver selloff. "You

could sell someone the right to put silver to you at a lower level and then if silver trades above that level come expiration you would keep the total premium involved."

Also weighing on silver prices was a 9% increase in speculative initial margin requirements on the Comex. It will now cost $12,825 to buy a 5,000 ounce futures contract and traders could be dumping some positions before they have to pony up more cash. George Gero, senior vice president at RBC Capital Markets, says that "opportunistic bargain hunting kept market from falling further."

Vote: How High Will Silver Prices Go in 2011?

A continuing weak U.S. dollar, however, should provide some support for gold and silver prices. The U.S. dollar index was down 0.28% to $73.81. Speculation that currency traders are covering their short positions headed into the two-day FOMC meeting is easing the dollar's recent selloff and pressuring precious metals.

Although the Fed meeting won't deliver any ground breaking results, Ben Bernanke's press conference might. If he intimates that the Fed's loose money policy will definitely end in June and the Fed's balance sheet will shrink, the dollar could keep rallying. If, however, some kind of flow of cheap money will continue being pumped into the system, even if the printing presses stop running, expectations are that this will hurt the dollar and help gold and silver.

Neglia says, "all eyes are on the two day Fed meeting, if prices remain strong through I would be a big buyer going forward."

James Moore, research analyst at FastMarkets, says "given the pace and scale of gains in gold and silver in recent weeks there is the threat of a deeper correction in the coming sessions, particularly if the FOMC minutes tomorrow indicate the Fed is close to starting monetary tightening."

Investors' love for gold and silver remains strong.

iShares Gold Trust

(IAU) - Get iShares Gold Trust Report

holds 134 tons, up almost 7% since the beginning of April. The

iShares Silver Trust

(SLV) - Get iShares Silver Trust Report

added 240 tons of silver Monday as the ETF traded a record 170 million shares.

The last big volume day was November 9th when the ETF traded 149 million shares but then corrected 15%, which would now take silver to the $42 level. However, on November 9th the U.S. dollar index was trading at $77.02 and then rallied 4.79% for the month to $80.73, the trajectory for the U.S. dollar seems biased to the downside rather than the upside ahead of the Fed's meeting lending some support to silver prices.

The U.S. dollar index is down 6.5% for the year while gold has rallied 6.88%, showing a tight inverse correlation. Silver is a different animal, with prices up 58.05% for the year, indicating that there is a lot more speculation in the market and perhaps an even steeper downside.

TheStreet Recommends

Gold mining stocks

, a risky but potentially profitable way to

buy gold

, were struggling.

Kinross Gold

(KGC) - Get Kinross Gold Corporation Report

was falling 0.26% to $15.19.

Other gold stocks were also lower.

Goldcorp

(GG)

was down 1.71% at $54.14 while

Agnico-Eagle

(AEM) - Get Agnico Eagle Mines Limited Report

and

Eldorado Gold

(EGO) - Get Eldorado Gold Corporation Report

were trading at $65.39 and $17.50, respectively.

--

Written by Alix Steel in

New York.

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Alix Steel

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RELATED STORIES:

>> Where will gold prices finish in 2011?

>> How High Will Silver Prices Go in 2011?

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