Friday's US PPI data certainly sparked some notable moves in the market, with the standout move being at the forefront of the US Treasuries curve. But at the same time, it sparked a resurgence in gold and saw major technological shifts.
Gold (XAU/USD) hourly chart
Ahead of the data, gold cleared the 200-hour moving average (blue line) and major trendline resistance before holding its break in US trading. The high was just above $2,060 and has since been pulled back slightly, with the recent 61.8 fib retracement level at $2,059.83 capping the rally for now.
However, looking at the chart, gold's technical momentum is definitely improving. As we saw above, the short-term bias is now more bullish after sellers continued to dominate throughout the early part of the year.
In the month itself, gold is currently down just 0.4% as it looks to make up for a weak start to the new year. Normally, January's seasonal pattern is one that favors gold, but as we mentioned earlier late last year, technical limitations could prevent such a trend this time around.
And even though gold's losses for the month have already been halved, key weekly resistance from 2020 highs around $2,073 remains a major challenge. And since this is only about 0.9% off current levels, there is a kind of ceiling nearby during which gold's upside could stall. Unless the bond market continues to see strong bidding like last week.
