Gold futures regained strength yesterday as the previous day’s sharp drop created buying opportunities for investors, while lingering fears over the euro zone’s sovereign debt crisis continued to support prices. Indian rupee weaken towards 48 against the dollar falling for an eighth session, tailing lower regional currencies and after a rebound in Asian equities got stalled and supported bullion on MCX. However, the sharp decline triggered some bargain buying from traders reluctant to bet that prices would fall further amid ongoing concerns over the euro zone’s sovereign debt crisis and worries over the global economic outlook. Market reported that Italy's FM held talks with Chinese officials about “significant” purchases of Italian bonds and investments in local companies. Despite the report, Italian bond yields crept higher ahead of a closely-watched Italian bond auction later in the day. Gold prices remained supported amid fears over a potential Greek debt default and concerns that ratings agency Moody's will downgrade the credit ratings of France’s three largest banks, later in the week due to banks' exposure to Greek government debt. Wall Street investment bank Morgan Stanley reiterated its positive view on gold in a report published Monday. Now technically market is trading in the range as RSI for 18days is currently indicating 61.02, where as 50DMA is at 25922.3 and gold is trading above the same and getting support at 27840 and below could see a test of 27446 level, And resistance is now likely to be seen at 28466, a move above could see prices testing 28698.

Trading Ideas:

Gold trading range is 27446-28698.

Gold edged higher supported by worries about a worsening debt crisis in euro zone.

Economic uncertainties tends to drive investors to put on bullish bets in the gold option markets

Holdings at SPDR Gold Trust edged lower to 1,241.311tns by Sept. 13 from a 2-1/2-week high of 1,241.917tns on Sept9.