Gold finds itself trapped in between its key hourly moving averages after falling from near the early November highs yesterday
Despite the market focusing on the reflation trade, gold eased in trading yesterday as price fell from near a test of the early November highs of $1,960-65 in a drop to $1,900.88.
The decline took gold near a test of its broken trendline resistance - now turned support - as well as its 100-day moving average (red line) below $1,900.
For now, those levels will be key to watch in case any downside momentum extends towards the end of trading this week.
However, the near-term levels will be the first thing to watch with regards to gold now:
Gold buyers relinquished the near-term bullish bias in trading yesterday in a drop below its 100-hour moving average (red line) but they held on to a defense at the 200-hour moving average (blue line) near $1,900 at the time.
The bounce higher since then has been limited by the 100-hour moving average and that continues to be the case in European morning trade today.
As such, gold is caught in a tussle in between its key hourly moving averages and the next significant technical move will come on a break on either side.
That said, topside momentum is still largely limited by the early November highs close to $1,960-65 while downside momentum is limited by the support levels highlighted above - sitting around $1,894-95 currently.
Those will be the key levels to watch for any major break in gold to start the new year.