In the U.S., although the Federal Reserve won't be raising rates anytime soon, recent hawkish comments from Fed members have indicated that quantitative easing won't be reupped in June when the current program expires. Some more aggressive Fed presidents, like James Bullard, are calling for a $100 billion cut from the $600 bond buying program.

If rates are raised globally and the Fed stops pumping cash into the system, gold prices could take a hit. Gold prices rose 15.2% in the three months leading up to the Fed's quantitative easing announcement. Silver prices popped 53%

The Fed, and gold prices, will take direction from Friday's jobs number. Expectations are for the unemployment rate to stay at 8.9% and for the private sector to add between 190,000 and 200,000 jobs.

"I expect that if we see a rise higher than 225,000, you will see more expectations of a hawkish stance out of the Fed," says Phil Streible, senior market strategist at Lind-Waldock, " which would lead to a strengthening dollar therefore putting pressure on the gold market."

Gold and silver are also contending with rebalancing headed into the second quarter where portfolio managers juggle positions to either take profits or ramp up holdings. Streible believes that "fund and money managers will continue to hold both positions as the metals continue to prove results by making new contract highs quarter after quarter."

Scott Redler, chief strategic officer for T3Live.com, sees gold as an investment and silver as a trade for the second quarter. "If we finally get a real breakout above $1,445-$1,450 and it holds, then I think we get to $1,550 and $1,600." Redler doesn't feel comfortable holding silver because prices are too volatile but looks for short term trading opportunities with the iShares Silver Trust ( SLV).

Jeb Handwerger, editor of GoldStockTrades.com, is adding to his gold positions on pullbacks. "These long pauses in the uptrend usually result in major moves to the upside rather than bearish tops which usually end in parabolic moves."

Gold mining stocks, a risky but profitable way to buy gold, were mixed. Kinross Gold ( KGC) was down 0.83% to $15.45 while Goldcorp ( GG) was adding 0.62% to $48.76.

Other gold stocks, Agnico-Eagle ( AEM) and Eldorado Gold ( EGO) were trading at $65.32 and $16.02, respectively.


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-- Written by Alix Steel in New York.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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