The near-term chart for gold tells a better story on price action in the precious metal so far this year:

During the downside push two weeks ago, gold struggled to get above the key hourly moving averages. And after a break of the 100-hour (red line) and 200-hour (blue line) moving averages earlier this week, gold suffered a significant drop and ran close towards a test of the $2,000 mark.

But amid a turn in broader market sentiment yesterday and today, gold has rebounded all the way back up to $2,029.

And that is seeing price run up against a test of the confluence of the 100 and 200-hour moving averages at $2,030.20 to $2,031.75. For sellers, keep below that region and the near-term bias will stay more bearish. For buyers, break above that and the bias will shift towards being more bullish instead.

On the week itself, gold looks poised for yet another drop but it really could’ve turned out worse. After the fall earlier this week, higher rates could’ve threatened a much steeper decline for gold if not for some resilience in broader markets. I still reckon there is a score to settle there but if in doubt, the technicals tend to act as a guide at least.

And in this case, gold is now returning to test a critical point that has defined price momentum so far this year. The next near-term move before the weekend at least will be defined by the battle between traders at the juncture above.

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