Gold yesterday settled down -1.59% at 26136 as compare with fall of -3.50% in international to its lowest in almost three years and was on course for a record quarterly loss after US data reinforced expectations for an end to ultra-loose monetary policy. Strong gains in US orders for durable goods, the largest annual rise in house prices in seven years and rising consumer confidence fuelled speculation the Fed would rein in its $85 billion monthly bond-buying programme, which had helped push gold prices to record highs in recent years. Gold prices have fallen by more than a quarter this year and by 22.8 percent this quarter, their biggest quarterly loss. Meanwhile the world's largest gold-backed ETF, New York's SPDR Gold Shares, reported the biggest one-day drop in its holdings in more than two months at 16.23 tonnes on Tuesday. That brought the fund's total outflow for the year to 381 tonnes. Demand in number one consumer India is likely to fall this quarter as the government moves to curb gold imports to reduce a record current account deficit. In the latest move, India's central bank told rural regional banks on Tuesday they could no longer provide loans against gold jewellery and coins. Worries about a liquidity crunch in China, drove down share prices despite attempts by the Chinese central bank to soothe markets. Physical gold demand could be hurt by a slowdown in Chinese growth. Technically market is under long liquidation as market has witnessed drop in open interest by -6.14% to settled at 12451 while prices down -423 rupee, now Gold is getting support at 25751 and below same could see a test of 25366 level, And resistance is now likely to be seen at
26528, a move above could see prices testing 26920.

Trading Ideas:

Gold trading range for the day is 25366-26920.

Gold dropped as a rallying U. S. equity markets further cut into demand for bullion as a hedge against economic uncertainty.

Official data showed that the U. S. economy grew significantly less-than-expected in the first quarter of 2013.

Demand in India is likely to fall this quarter as the government moves to curb gold imports to reduce a record current account deficit.