Gold fell as bullion investors took profits after the metal's sharp rally, and as a stock market rally on Wall Street showed investors willing to put money into equities again. Gold's declines come after four consecutive days of record settlements and as prices locked in a 16% gain since the start of August. Increased gold price volatility is also making some investors cautious as talk of higher gold margins hangs over the market. Shanghai Gold Exchange said on Tuesday that it will raise trading margins on three gold spot-deferred contracts to 12 percent from 11 percent from Aug. 26 to limit trading risks following recent wild price swings. The move turned up the heat on Comex traders, who have been anticipating a similar decision from Comex owner CME Group Inc. China's largest gold exchange said gold margins will be raised to 12% from the current 11% starting with the Aug. 25 market settlement, in a move to curb price volatility. The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings dropped 1.9 percent to 1,259.57 tonnes Tuesday from 1284.40 tonnes on Monday. Now technically market is in overbot as RSI for 18days is currently indicating 77.78, where as 50DMA is at 24053.28 and gold is trading above the same and getting support at 27253 and below could see a test of 26910 level, And resistance is now likely to be seen at 28112, a move above could see prices testing 28628.

Trading Ideas:

Gold trading range is 26910-28628.

Gold fell as bullion investors took profits after the metal's sharp rally

Shanghai Gold Exchange overnight raised its gold margins to 12% from 11% from Aug. 26

SPDR Gold Trust holdings dropped by 24.83 tonnes to 1259.57 tonnes