Gold tumbles toward $1250 as USD soars

A surprise rally of the US dollar pushed the value of the ounce sharply to the downside. Gold tumbled from $1265 to $1251, hitting the lowest level since July 26. The price of the yellow metal remains near the lows, under pressure.

The area above $1250 capped the slide so far, but still points to the downside. The recent slide sent gold below Friday's lows. After the NFP it tumbled to $1253. Then it bounced modestly to the upside, consolidated on Monday, and today it was moving to the upside, recovering lost ground, before turning sharply to the downside.

The greenback started to rise after a strong JOLTS report. Job Openings came in at 6.163 million in June, above market expectation of 5.775 million. After the data, the greenback resumed the post-NFP rally.

The sharp move to the downside was accompanied by a rally of equity prices on Wall Street and also by rising US bond yields. The Dow Jones hit a new intraday record high and is up 0.16%, at 22,150 points. The 10-year yield rose from 2.25% to 2.28%.

Levels to watch

Gold found support near $1250, that is a key area. Currently, trades at $1252, down 0.40% for the day and more than $10 below daily highs. Under $1250, the next support might be seen at $1243 (Jul 26 low) and $1235 (Jul 20 low). On the upside, resistance might lie at $1255 (20-day moving average), $1265 (daily high) and $1271 (Aug 3 high).