Gold ended higher after Federal Reserve Chairman Ben Bernanke's key speech raised hopes of a new round of monetary stimulus for the U.S. economy. Gold posted its biggest daily gain in two months, sharply outperforming U.S. equities which edged up in late trade. The metal posted a 4.5 percent gain in August, its third straight monthly rise and its biggest since January. In a speech to central bankers in Jackson Hole, Wyoming, Bernanke spoke of "grave concern" about a stagnant labor market, and said the economy faced "daunting" challenges. He stopped short of saying the Fed was ready to buy government bonds in another round of quantitative easing, or QE. Gold fell immediately following the release of Bernanke's speech, then quickly rebounded $45 per ounce, or almost 3 percent from its session low, as investors digested his comments and concluded they were stimulus friendly. Since then, Bernanke's failure to hint at more easing had prompted gold investors to reduce bullish bets and threatened to end the metal's 11 consecutive years of bull rally.  In the physical gold market, August sales of the U.S. Mint's American Eagle gold coins are on track to be the weakest for the month since 2007. Now technically market is in overbot as RSI for 18days is currently indicating 76.33, where as 50DMA is at 30120.4 and gold is trading above the same and getting support at 31269 and below could see a test of 31196 level, And resistance is now likely to be seen at 31410, a move above could see prices testing 31478.

Trading Ideas:

Gold trading range for the day is 31196-31478.

Gold ended higher after Fed Chairman’s key speech raised hopes of a new round of monetary stimulus for the U.S. economy

Bernanke spoke of "grave concern" about a stagnant labor market, and said the economy faced "daunting" challenges.

August sales of U.S. Mint's American Eagle gold coins are on track to be weakest for the month since 2007.