Gold yesterday settled up 1.5% at 26296 edged higher as support seen as rupee slumped on Wednesday to approach a record low, falling for a third consecutive session, as fears of continued foreign selling kept the focus on how to finance the country's record CAD. Support seen following comments by two US Federal Reserve officials that the central bank's economic stimulus could continue for some time. But investor sentiment remained dour as outflows from ETF continued and demand failed to pick up even though prices remain near three-year lows, indicating the market is expecting further declines. Gold, typically seen as a hedge against inflation, posted its biggest ever quarterly loss of almost 23 percent for the April-June period on fears the Fed would end its $85 billion monthly bond purchases. Fed Chairman Ben Bernanke said last month the US economy was recovering strongly enough for the bank to begin tapering its stimulus in the next few months, and possibly end the programme in mid-2014. However, the exact timing of the tapering is still not clear. Markets are awaiting US nonfarm jobs data later this week for clues on the strength of the world's biggest economy. Two senior Fed official said on Tuesday that the bank's monetary policy to support the economy will likely be warranted for some time to come. Also SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.37 percent to 964.69 tonnes on Tuesday, hitting fresh four-year lows. Gold demand in India, the world's biggest buyer of the metal, remained lukewarm on Wednesday as a drop in the rupee lifted local prices by more than one percent amid restrictions by the central bank on gold imports. Technically market is getting support at 26068 and below same could see a test of 25839 level, And resistance is now likely to be seen at 26478, a move above could see prices testing 26659.

Trading Ideas:

Gold trading range for the day is 25839-26659.

Gold ended with gains as the dollar and equity markets remained under pressure after mixed U. S. data

Data showed U. S. initial weekly jobless claims fell for second straight week last week and the country's private sector created more jobs than expected.

Sentiment remained guarded however as outflows from ETFs continued and physical demand failed to pick up after prices plumbed last week