Gold yesterday settled down -0.67% at 27766 despite the dollar's decline in session marked by uncertainty over the fate of US monetary policy. Pressure seen since morning session after Rupee recovered a large part of its losses helped by dollar sales from a corporate and exporters, but disappointment over lack of any specific measures from the government prevented a further rise. Gold and the dollar tend to trade inversely with one another, though investors avoided both assets and opted to ride out uncertainty in the yen until the Fed signals when it may scale back monetary stimulus programs. Investors fear a strengthening economy could prompt the Fed to start winding down its $85 billion monthly bond purchases that have supported gold prices. Asian shares recovered from multi-month lows on Friday, as a rebound in US equities on the back of upbeat economic data calmed nerves after a bruising selloff, but investors remain cautious ahead of next week's Fed policy meeting. Commodity funds run by some of the most high-profiletraders have declared negative returns through the first five months of the year, performance data from their investors showed on Thursday. Meanwhile Net gold imports into India have fallen from an average of $135 million in the first half of May to $36 million in the second half, the finance minister said. The government has raised the import duty on gold and curbed gold financing in an effort to cut its current account deficit. Also SPDR Gold Trust said its holdings fell 0.63 percent to 1,003.53 tonnes to fresh four-year lows. Technically market is now getting support at 27590 and below same could see a test of 27413 level, And resistance is now likely to be seen at 28065, a move above could see prices testing 28363.

Trading Ideas:

Gold trading range for the day is 27454-28246.

Gold dropped as U. S. economic data added to feverish speculation on the possible timing of scaled-back U. S. Federal Reserve monetary stimulus.

Indian gold demand remained subdued, and importers and wholesalers struggled to sell supplies from May.

Demand from major buyer China, which returned from a three-day holiday on Thursday, held losses in check.