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U.S. gold rose to a record high on Thursday for a second day, after going up on Wednesday. The metal's rise was modest -- gold rose $9.10, or 0.60%, to close at $1,535.90 an ounce. Gold prices hit an intraday low of $1,524.00 and a high of $1,538.10 an ounce. Relative strength indicator for gold sits at 80.23. Gold prices were heading down late Tuesday but began rising Wednesday shortly after the FOMC (Federal Open Market Committee) released its policy statement following a two-day meeting. FOMC chairman Ben Bernanke conducted the first ever post-FOMC press conference. Gold really took off after getting further clarity and reasoning of Fed's easy money policy.

Silver futures prices for May delivery, now the most active contrast, rose $0.61, or 1.28%, to close at $48.42 per ounce on the Comex in New York. Silver prices hit an intraday low of $47.25 and a high of $49.47. The relative strength indicator sits at 81.97.

Some suggest that silver is reaching a crescendo. Silver prices have gone parabolic recently. Silver took a nose dive on Tuesday, dropping 10% in less than 24 hours. But silver recovered on Wednesday and Thursday. There is extreme optimism in the investment community regarding silver. Please note that at these times of extreme optimism, volatile pullbacks become more prevalent. Does that mean silver is ready to take another drop soon. Not quite. On the contrary, I think, silver is going to see better days before it prepares itself for a drop. So, Is this a secular long term top in gold and silver? I do not believe so. Silver, the superstar commodity of the year, has lot more room to run on the upside. Of course, there will be higher volatility in coming days, but there is still a lot higher silver can go. MMTC, India's largest bullion importer, plans to double its silver purchases this fiscal year to 1,500 tones, to catch up with exploding investment interest. HDFC, one of the biggest Indian banks, is continuing to buy more gold and silver to keep up investor demand from it's clients.

If you believe in the gold and silver story, you can take advantage of the climb in gold prices by getting long exposure to GLD (iShares Gold Trust) or UGL (ProShares Ultra Gold). You can also benefit by getting short exposure to GLL (ProShares UltraShort Gold). You can take advantage of the climb in silver prices by getting long exposure to SLV (iShares Silver Trust) or AGQ (ProShares Ultra Silver). You can also benefit by getting short exposure to ZSL (ProShares UltraShort Silver).

The dollar wallowed at three-year lows against a basket of currencies early in Asia on Friday and remained on track for its biggest weekly fall in 14 weeks, though selling pressure eased as bears were already very short. The U.S. dollar index (NYSEARCA:UUP) was down 0.40, or 0.55%, to close at 73.12. The U.S. dollar index hit an intraday low of 72.87 and a high of 73.36. The U.S. dollar index failed to cross the middle band of bollinger bands and closed below the seven-day moving average. This does not bode well for the U.S. dollar. Traders see more weakness in the U.S. dollar in coming trading sessions.

Disclosure: I am long SLV.