After catching a bid from support early in the week near $1450, gold prices are bouncing higher. There is quite a bit of resistance nearby which leads me to believe this rally might not have legs.

Risk sentiment in the markets has been a big driver in the recent gold recovery. Equity markets have lost some momentum, and in the currency markets, the safe haven’s are bouncing higher.

In the bond market, the 10-year yield is on pace to post a fourth day of losses. There is some support there from the 20 and 100-day moving average which are both within proximity.

The USD/JPY exchange rate turned lower slightly ahead of major resistance this week. A one-year declining trendline points to major resistance near the 110.00 handle but the exchange rate saw some strong selling around 109.70 and is down about 0.8% from its recent high.

Market sentiment shifted earlier in the week after US President Trump failed to provide further news regarding the trade war between the US and China.

While the US markets have held up fairly well, equity indices in Europe and Asia have fallen under a bit of pressure.

Gold is up just over half a percent from recent lows after an earlier tumble which reflected a decline over 4% as measured from the November high.

I think there is some major resistance nearby and therefore have some doubts that the current recovery will turn into anything meaningful. The first level that I am watching falls at $1472 which is a level that held the pair higher in September, on a daily close basis.

Beyond that, I see further resistance in the $1480-$1486 area. This is an area that provided support on several declines in October. Further, the 20 and 100-day moving averages fall near it to create a confluence.