Gold waits on US inflation data for next move

<p>The precious metal is down 1.5% on the month in a rather poor start to January trading this year. The retreat sees gold back away from key weekly resistance around the 2020 highs at $2,073 but price is not falling off a cliff just yet. Here's a look at the technical picture at the moment:</p><p>While sellers are staying in control in the near-term, there is yet to be a bigger test of key support levels for now. The trendline support from the November and December lows is seen at around $2,008 and we haven't gotten to that yet, let alone a test of the $2,000 mark.</p><p>So, the downside pressure is not exactly overwhelming as of yet. Adding to that, there is also a crossover from the daily moving averages with the 100-day moving average (red line) now inching past the200-day moving average (red line). That typically is a bullish signal, so it is something for traders to work with as well.</p><p>That being said, whatever technical argument you may have for gold, will still come down to what the US CPI data has to say tomorrow. In that sense, it is a bit of a double-edged sword for the precious metal.</p><p>A softer set of inflation numbers from the US tomorrow could see gold rally alongside risk assets as bond yields retreat. But on the flip side, a stronger set of inflation numbers will see a repeat of last week's price action. And that is likely to bring gold down towards the key support regions outlined above.</p>

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