On the heels of the US Federal Reserve signaling that it will be even more cautious than expected in the shift towards monetary policy normalization, gold rallied to three week highs today. Traders had positioned themselves on the short side of gold recently based on positive US data but they were caught off guard with yesterday’s FOMC statement. Short covering was a clear aspect of gold’s positive price action today in which the yellow metal gained nearly 2%. While the move was encouraging, gold wasn’t able to break through the key technical resistance level of its 200 day moving average at $1,206.50. This is the near term figure to keep an eye on with $1,230 the next major area above it. Silver had a more disappointing day than gold and demonstrated how it is not considered in the same class of inflationary hedge as gold. Silver made an intraday high at its 50 day moving average of $16.48 but lost steam and retreated to close its session at $16.20.