Gold off to a poor start in January trading this year

<p>It's a rough start to the new year for gold as it is down 0.8% in the last two days, not really setting itself up for the usual January seasonal tailwind. There were some doubts already considering that we are at a technical top but the latest dip today now sees gold also fall below key near-term levels. In particular, the 200-hour moving average (blue line) is now being cracked:</p><p>This now invalidates the recent upside momentum, with the near-term bias now favouring sellers instead. That comes as price is now trading under both the 100-hour (red line) and 200-hour moving averages.</p><p>That presents quite a bit of a challenge now for gold to try and build on its usual January seasonal tailwind. December was a good month for gold but as mentioned in this post <a href="https://www.forexlive.com/news/gold-tees-up-the-new-year-by-continuing-its-december-hot-streak-20231228/" target="_blank" rel="follow">here</a>, there were some reservations to the high points as it comes during a time when liquidity conditions were thin.</p><p>Add to the fact that we are at a technical top near the 2020 highs at $2,075 – one that gold buyers have not cracked on the weekly chart – and there is a possibility of a squeeze lower. And that is being vindicated by the reversal of the sell the dollar, buy everything else mood yesterday and today.</p><p>There is now some minor support for gold from the Fib retracement of the swing higher from mid-December to late-December, seen at $2,030 and $2,044. But if we are to see broader markets stick with the theme this week, the big level to watch next for gold will be a retest of the $2,000 mark.</p>

This article was written by Justin Low at www.forexlive.com.