Gold trying to stabilize after a volatile swing, around $1221

   “¢   The post-US data bullish quickly fizzles out amid a modest USD rebound.
   “¢   Sliding US bond yields extended some support and helped rebound sharply.  

After a rather  volatile trading action during the early North-American session, Gold is now trying to stabilize near the $1221-22 region.  

The precious metal refreshed session high in reaction to softer than expected US core PCE price index, albeit quickly faded the up-move, with a modest US Dollar rebound seen as one of the key factors behind the dollar-denominated commodity’s sharp intraday turnaround.  

This coupled with a positive opening for the US equity markets, which tend dampen demand for traditional safe-haven assets, and further aggravated the selling pressure and dragged the precious metal to 1-1/2 week low level of $1214.  

The commodity reversed the course again and managed to quickly recover early lost ground back closer to YTD, low set on July 19. The rebound was supported by the ongoing slide in the longer-term US Treasury bond yields, which extended some support to the non-yielding yellow metal.  

This coupled with a reluctance to place any aggressive bets ahead of the latest FOMC monetary policy update and the keenly watched US monthly jobs report (NFP) might have further prompted some short-covering at lower levels.  

However, the latest release of better-than-expected Chicago PMI and Conference Board US consumer confidence index continued underpinning the USD and was now seen keeping a lid on any further up-move.

Technical levels to watch

The $1225 area might continue to act as an immediate hurdle, above which the commodity is likely to aim towards testing $1232 horizontal resistance en-route $1335 heavy supply zone.

On the flip side, $1218 level once again becomes an immediate support to defend, which if broken would increase the metal’s vulnerability to retest YTD lows, around the $1212-11 region.