Gold keeps steadier on the day but price action still leaves a lot to be desired

Technical Analysis

Author: Justin Low | gold

Gold continues to be caught in a battle around key technical levels

Gold is slightly higher, up by 0.15% to $1,844 levels currently but that's not really telling much as we continue to navigate through the week. Looking at the near-term chart:
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Gold D1 19-01
Gold is trading back towards its 100-hour moving average (red line) as buyers wrestle back some near-term control. However, that doesn't mean all too much considering that price action appears to be stuck in a consolidation phase between $1,830 and $1,860.

That is more telling of gold's current status as there is still a lack of conviction to either break lower or rebound higher following the latest decline to start the new year.

The daily chart offers a better overview of the situation:

Gold H1 19-01
The consolidation area between $1,830 and $1,860 is largely centered around the 200-day moving average (blue line). That level sits @ $1,844.81 currently.

Keep below that and sellers retain control in pushing for a more bearish bias. However, there is still the key trendline support in play @ $1,824 before getting to $1,800.

Those are key lines in the sand that sellers must cross before being able to establish a further push towards the 30 November low @ $1,764.80 potentially.

As for buyers, the key is to breach above the 200-day moving average for starters and then look towards holding a firm break above $1,860; that would also see a breach above the 100 and 200-hour moving averages i.e. near-term control turning more bullish.

So, the technical red lines can be clearly defined and limited at this stage. All there is left is for the market to make up its mind.

Real yields will continue to be a key spot to watch for gold in that regard, as the market tries to sort out what to do with the reflation narrative to start the year.

But dollar strength/weakness will also be a key factor to watch and Yellen's confirmation hearing later today may offer more clues on that for the remainder of the week.

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