In the last few hours volatility on gold has declined with the price recovering slightly. Bullion is trying to stabilize after the selloff earlier this week which pulled down the price from $1,900 to $1,855. Technically it is now clear that the threshold of $1,850-$1,855 represents the first important support level. A fall below this zone would denote further short-term weakness. Vice versa, on the upside, there is no real resistance until $1,900, although the area around $1,875-$1,880 is likely to be the first test for any recovery attempt.
We should also remember that Christmas is approaching and in the next few trading sessions liquidity will be lower than usual, which could generate some spikes in both directions. That said, gold remains on track to finish this strange year with a gain of more than 20%.