Gold traded sharply down falling below psychological support at $1600 an ounce but on MCX market closed flat as rupee weakened in quiet trading after the Federal Reserve refrained from new US monetary stimulus, denting hopes for gains in global risk assets also pressure seen on rupee and gold after the ECB frustrated market expectations for monetary policy action to manage the debt crisis in the euro zone, sending the US dollar higher. Pushing gold lower, Draghi stated the bank may undertake bond purchases in order to bring down the "exceptionally high" borrowing costs of stressed euro zone members, but provided no explicit details on how and when these activities may be carried out. The ECB will work out the details of the bond buying program "over the coming weeks", Draghi said, adding that the operation would be of a size "adequate to meet its objectives". The statement disappointed market expectations for bold steps to counter the debt crisis, which have been building since Draghi pledged last week to do whatever is necessary to preserve the euro. The euro had rallied against the greenback ahead of the press conference, buoyed by expectations for decisive action from the ECB. Now technically market is getting support at 29587 and below could see a test of 29508 level, And resistance is now likely to be seen at 29747, a move above could see prices testing 29828.

Trading Ideas:

Gold trading range for the day is 29852-30220.

Gold fell as investors continued to unwind bullish bets due to a lack of more aggressive actions by ECB

ECB President Mario Draghi said any government bond buying would not come before September

South Korea said that it bought 16 tonnes of gold in July, its second purchase this year.