Gold dropped by -0.72% to settled at 31087 level despite of gold advanced to a new 11-month high in international market after ECB President Mario Draghi reiterated that the central bank was ready to start purchasing the debt of troubled euro zone states earlier in the day. The fall in gold price on MCX was because of rupee rallied by +0.92% to settled at 51.98 punched through a key barrier of 52 reflecting expectations that the government would announce additional measures to boost economic growth. Speaking at the ECB’s post-policy meeting press conference, Draghi said the central bank was ready to undertake OMT when the prerequisites are in place and reiterated that the central bank was acting strictly within its mandate in undertaking a bond buying program via OMT’s. Draghi also said economic risks in the euro zone remain to the downside and added that economic indicators point to weak growth in the Q3. The ECB left rates on hold at a record low 0.75% earlier, in a widely anticipated decision. Sentiment on the euro has been bolstered by hopes that Spain will soon request a bailout and trigger the ECB’s bond purchasing program, a move which investors hope would ease the debt crisis in the region. Gold traders now looked ahead to Friday’s key US non-farm payrolls data, which will allow investors to gauge the strength of the labor market. Now technically market is getting support at 30997 and below could see a test of 30908 level, And resistance is now likely to be seen at 31242, a move above could see prices testing 31398.

Trading Ideas:

Gold trading range for the day is 30908-31398.

Gold dropped on rupee firmness despite prices rose in international as inflation-hedge appeal of bullion was bolstered

ECB kept its main interest rate unchanged at 0.75%, while the BoE kept policy on hold at a record low 0.5%

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings hit a record high of 1,333.44 tonnes by Oct. 4.