Gold rallied on domestic market and settled with a gain of 0.75% at 31375  as rupee weakened to its lowest level in three weeks on Thursday and settled with a fall of -0.72% at 53.34 as large dollar demand from oil firms late in the session weighed but gains in the domestic share market prevented a much steeper fall. While in international gold dropped as weaker US equities and uncertainty over the commitment of Germany and France to battle the euro zone debt crisis prompted the bullion market to consolidate gains after its recent rally. The metal declined as the dollar rose against the euro after Berlin and Paris, Europe's central powers, clashed over greater EU control of national budgets and other issues before a summit of the bloc's leaders. Earlier in the day, data showed China's economy slowed for a seventh straight quarter, even though other numbers pointed to a mild year-end rebound. Trader are caution as without any other major drivers, the precious metals will continue to show weakness and test the downside because the latest buyers might lack patience to wait for another bull run. Physical demand was weaker than expected for the time of year, when the traditional Indian wedding season, the Islamic Eid al-Adha festival and the build-up to Christmas and Chinese New Year tend to ramp up bullion buying. Now technically market is getting support at 31197 and below could see a test of 31018 level, And resistance is now likely to be seen at 31473, a move above could see prices testing 31570.

Trading Ideas:

Gold trading range for the day is 31018-31570.

Gold gains on rupee weakness despite prices dropped in international as a strong greenback depressed demand for dollar

Demand from gold importers in India appeared to wane as a weaker rupee drove up domestic prices

Gold market appears to have factored in optimism related to the U.S. Federal Reserve's monetary stimulus announced in September