Gold plummets to weekly lows below $1260 on greenback strength

The ounce troy of the precious metal depreciated against the US dollar on Friday with the XAU/USD pair falling to its lowest level since July 26 at $1254. As of writing, the pair was trading at $1258, losing 0.85%, or $10.8, on the day.

Following the better than expected employment figures from the United States, the US Dollar Index gained traction and surpassed mid-93s for the first time this week to refresh its weekly peak at 93.65. As of writing, the index was at 93.50, gaining 0.85% on the day. In addition to the solid NFP data, which decreased to 209K in July but still beat the market expectation of 183K, trade balance numbers also came in better than expected as it contracted to $43.6 billion from $46.4 billion. 

• US: Total nonfarm payroll employment increased by 209,000 in July
• US: Goods and services deficit was $43.6 billion in June, down $2.7 billion from May

On the other hand, supported by today's optimistic data, major equity indexes in the U.S. started the day higher, hurting the demand for traditional safe-havens like the XAU. At the moment, the Dow Jones Industrial Average is adding 13 points while the S&P 500 is up 0.04%. With no more macro data left in the session, the pair's price action is likely to be impacted by the market sentiment and the greenback demand.

• US stocks trade higher on strong jobs report

Technical outlook

With today's downfall, the CCI indicator on the daily graph returned to 0, suggesting that the bullish momentum faded away completely. The pair could face the initial support at $1251.50 (20-DMA), $1243 (Jul. 26 low) and $1231 (200-DMA). On the flip side, resistances could be seen at $1265 (Jul. 27 high), $1274 (Aug. 1 high) and $1279 (Jun. 14 high).