Gold drops to session low as USD regains traction

Having retest $1200 mark, Gold reversed daily gain and has now drifted into negative territory amid resurgent greenback buying interest. 

A surprisingly stronger-than-expected US core PPI print now seems to have revived hope of higher inflationary pressure in the US economy and negated a slightly lower-than-expected monthly retail sales growth, albeit was far better-than previous months dismal growth.  

Upbeat PPI reading lifted the greenback across the board, with the key US Dollar Index recovering all of its early lost ground, and is now weighing on dollar-denominated commodities - like gold. At the time of reporting the yellow metal was trading at session low, around $1191 region, still headed for third consecutive weekly gains. 

Next on tap is the preliminary release of UoM Consumer Sentiment Index, which is expected to tick higher to 98.5 for January from December's 98.2. An upbeat reading on consumer confidence would provide an additional boost to the greenback's recovery move. 

Technical levels to watch

A follow through selling pressure is likely to accelerate the slide back towards 50-day SMA support near $1187 below which the commodity seems drift back towards $1180 horizontal level, en-route $1172-70 strong support. 

On the upside, $1200 handle remains immediate strong hurdle, which if conquered might now lift the metal beyond Thursday's 7-week high resistance near $1206 region towards testing its next important hurdle near $1215 region.

    1. R3 1221.09
    2. R2 1214.02
    3. R1 1204.65
  1. PP 1197.58
    1. S1 1188.21
    2. S2 1181.14
    3. S3 1171.77