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.