Gold surged in the line of expectation as Bernanke statement that further monetary easing may be instituted sent the dollar tumbling and the precious metal higher. Gold futures spiked higher when Bernanke stated that further monetary accommodation is needed to bring about big gains in the US jobs market, which he described as “far from normal,” despite a recent improvement. "Further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies," Bernanke said. The comments helped fuel speculation that further QE from the central bank may be coming, weakening the dollar and in turn strengthening dollar denominated commodities. The euro turned higher against the dollar following Bernanke’s words, climbing close to a 4-week high. Gold remains more sensitive to moves in the euro/dollar exchange rate in the short term than to rising risk aversion, which in the past has been a positive driver of prices. QE by the Fed, keeps interest rates and borrowing costs low, which makes gold more attractive compared with yield- or dividend-bearing assets such as bonds or stocks. Now technically market is trading in the range as RSI for 18days is currently indicating 56.56, where as 50DMA is at 28147 and gold is trading above the same and getting support at 28181 and below could see a test of 27994 level, And resistance is now likely to be seen at 28475, a move above could see prices testing 28582.

Trading Ideas:

Gold trading range for the day is 27994-28582.

Gold surged as Bernanke statement that further monetary easing may be instituted.

QE by the Fed, keeps interest rates and borrowing costs low, which makes gold more attractive.

SPDR gold trust holdings rose by 6.05 tonnes to 1288.74 tonnes.