As Federal Reserve Chairman Ben Bernanke testified before Congress, yields on 10-Year Treasurys touched two percent for the first time since March. This as investors became nervous that the Fed could wind down their bond-buying program sooner than expected. Of course, this also has the potential to negatively impact the stock market.

All eyes are on the Federal Reserve.

Gold's choppy overnight trade kept the metal above $1,380, and it rallied to $1,388 shortly after midnight. Traders will be tuning into Fed Chairman Ben Bernanke's testimony in Congress on Wednesday morning for any clues about the bank's bond purchasing program.

Additionally, the Federal Open Market Committee Meeting minutes will be released in the afternoon, and traders again will be looking closely. The big question is when the Fed will stop or taper quantitative easing.

(Read More: Hilsenrath: Here's What Bernanke Will Say)

(Also: Don't Expect Bernanke to Talk Taper...Yet, Pro Says)

With Consumer Confidence at the highest levels in years, and the equity market continuing to rise, gold has taken a back seat as investors flock to more attractive investments. The metal was able to trade well off the lows it put in on Sunday night, but gold has been capped at $1,400. Only a close above $1,404 will be able to signal a potential bottom in this market.

Move over Apple CEO Tim Cook, because the market will be listening out for even more important congressional testimony on Wednesday morning.

In a hearing starting at 10 a.m. EDT, Federal Reserve Chairman Ben Bernanke will go before the Joint Economic Committee to give his outlook on the U.S. economy. But what investors will really be listening out for is what Bernanke says about when quantitative easing will end.

However, according to The Wall Street Journal's chief economics correspondent, Jon Hilsenrath, the chairman's testimony could be hamstrung by disagreement within the Fed.

Gold prices fell two percent on Tuesday, surrendering much of the previous session's hefty gains, as strength in the dollar against a basket of major currencies weighed on the precious metals.

Gold, down in seven of its last eight sessions, fell on a firm dollar, weak technical signals and speculation that the U.S. Federal Reserve might rein in its stimulus program.

Meanwhile, silver remained under pressure, but well off Monday's lows, when it slid nearly 10 percent to a 2-1/2 year trough, on heavy fund liquidation in Asian trade and generally weak fundamentals for the metal.

It's been a tough month for bonds. In May, 10-year Treasury Notes have dropped by four and a half percent. But with Fed Chairman Bernanke testifying before Congress on Wednesday, would you rather be long or short bonds right now?

Crude oil was extremely volatile last week, with big moves both to the upside and the downside, but one pattern did emerge. The range it has traded in has held over the last few weeks. Crude oil has been a sell in the $96.50 to $97 areas, and a buy between $93 and $92.

But let's take a closer look. I would like to buy dips in crude this week for two reasons.

First, as we head toward Memorial Day weekend, demand for products picks up. This applies to gasoline to be sure, but in addition, demand for ultralow sulfur diesel (the former heating oil contract) has been strong, so that alone should keep crude supported for this week.

Second, there are rumblings on the geopolitical front. Syria is still out of control, Iran nuclear talks are going nowhere, and over the weekend, North Korea launched short-range missiles.

(Read More: North Korea Fires Short-Range Missiles for Second Day)

Because of these overhanging geopolitical factors, if you are shorting crude, you have to place stops. Indeed, if something breaks out, crude could instantly pop $20. That has always been the interesting dynamic of crude: Any news about it usually means it will spike higher.

Only economic weakness sends it lower. And for now, the U.S. seems stronger, and demand worldwide has been growing.

So where would I buy in to this market?

The support areas at which I would look to buy are $95 to $94.50,and then $94 to $93.50. I would sell cautiously between $96.50 and $97.50, with a tight stop above $97.50. But I would rather trade it from the long side right now.

Expect gold to bounce when it retests April's low for the first time. But after that, there could be more trouble.

Gold opened up much lower on Sunday night, as metals took a beating once again. Silver was down as much as 8 percent, dipping to $20.25. Gold tested our next major support level, putting in a low at $1,336.30.

(Read More: Gold Heads for Longest Slide in Four Years)

Since the open, things have stabilized. Gold has reached back above $1,350, testing the electronic close from Friday, although still down more than $10 from the marked floor close. Silver has erased much of its losses, but is still down sharply on the day.

Much of this choppiness can be attributed to currencies, as the dollar index hit a high of 84.40. As we have said many times before, a stronger dollar will put pressure on commodities priced in dollars. Aside from currencies, though, gold's weakness has been no secret. Especially when the Consumer Confidence reading came in a six-year high late on Friday, there was additional selling into the close.

Look for the prior $1,335.60 low to act as a major support now, but note a retest will likely send this market lower, with less emphasis on the $1,321.50 April low. The next major downside level is $1,283.50, but as we have previously mentioned, a close below that could potentially send this market down to $1,154.

Gasoline has risen 1.5 percent in the past week, even while crude oil has dropped. This even though the two products usually move together.

Gold bears need a close below $1,368, and bulls needs a close above $1,404.

On Thursday night, gold retested the Thursday session low of $1,368, which was put in early in the day. Friday's lower price action follows a rally off of the lowest level seen in four weeks, which allowed gold to get a marked close of $1,386.90 on Thursday.

On Friday morning, the low of $1,371 has provided some support, as gold tests the major $1,383.90 resistance and retracement level.

Thursday's recovery found major resistance against Wednesday's support shelf at $1,389. It will be important for the bear camp to see a close below $1,383.90, but psychologically, it will be more important to see sustained price action below $1,380.

The trend is clearly bearish, and action in the low $1,370s will likely break the camel's back and push gold to new lows. The next major support is comes in at $1,335.60, which was the low of a reversal day. Below that, gold is supported at the previous low of $1,321.50.

Price action above $1,383.90 will help the bulls gain some intermediate-term control. Although resistance will be found at $1,389 as well, sustained price action in the mid-to-high $1,380s will likely find buyers into the end of the week, bringing the market to the next resistance level at $1,396.20 to $1,397.

Given those levels, here are two short-term out-of-the-money options plays on the gold futures that you may want to consider. Bullish traders should consider buying the June 1,420-strike calls for $900, which provides 11 days of long gold exposure. Bearish traders should consider buying the June 1,335-strike puts for $1,000, which will provide them with 11 days of short exposure.

Whatever your bias in gold, futures options are liquid and trade nearly 23 hours a day.The idea here is that in a volatile market, options can be used to trade with calculated risk.

Good luck and good trading.

Peter Schiff of Euro Pacific Capital has been bullish on gold for a long time, but now he has a new reason to buy: Japan.

That nation's sweeping plan to boost its economy has seen the Bank of Japan pledge to buy 7.5 trillion worth of government bonds a month (about 70 percent of new Japanese issuance), and Japan is embarking on stimulus in the form of government spending.

Japan's first-quarter gross domestic product data showed that its economy grew by 0.9 percent on a quarterly basis (3.5 percent annualized), which has led to a degree of optimism that Prime Minister Shinzo Abe's policies are working.

But Schiff was steadfast in his belief that Abe's plans will come to grief and that the prime minister has an unsustainable situation on his hands in aiming for a 2 percent inflation rate.

(Read More: Japan's Economy Boosted by Consumption, Exports)

In an April blog post, Schiff wrote that "the idea that informs Abe's plan, that rising prices entice consumers to buy before prices go up, is clearly suspect as economic law dictates that demand increases when prices fall."

Thus, he said, the plan is destined to fail—and quickly.

"Japan will unleash an inflation tsunami if it tries to keep its bond bubble from popping with more qualitative easing," Schiff said. "If it shows restraint, the bubble will burst, eventually taking stocks down with it."

In other words, Japan is doomed to inject increasingly more money into the system, spurring inflation, which will in turn dramatically boost the price of gold, according to Schiff.

"Gold is a buy, and the Federal Reserve and Bank of Japan policies will drive the metal to new highs," he said. "So will the easy-money policies of other central banks that are joining the currency war."

Given that gold's record price is more than $1,900 and the metal now sits below $1,400, Schiff has good reason to pick up a few ounces.