Gold settled down -0.23% at 28650 giving up it's gains and fell slightly as Equities rallied, but losses were limited by the euro's gain versus the dollar and caution ahead of the key U. S. nonfarm payrolls report on Friday. The metal initially rose on a stronger euro after ECB President said there is no euro zone deflation problem, following the bank's decision to leave interest rates unchanged. Bullion later came under pressure after data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week, a sign that the job market and the broader economy are improving. Investors are now eyeing the Friday release of U. S. nonfarm payrolls data, a key gauge of the labor market, as any setback in economic growth could prompt the Fed to slow the pace of its stimulus tapering. Concerns about the fragility of stock markets after a heavy selloff in recent months has piqued some investors' interest in gold, with the world's largest bullion-backed ETF, the SPDR Gold Trust, reporting a 3.9-tonne inflow on Tuesday. But holdings remained unchanged on Wednesday. In the physical markets, traders were waiting for the return of Chinese market on Friday, after a week-long holiday for the Lunar New Year. Sentiments remain weak in Indian physical market as gold imports are expected to decline this year as government has taken several measures to curb shipments to address the high current account deficit. According to the jewellers body, total gold imports may decline to below 500 tonnes this fiscal due to these restrictions, from 845 tonnes in the last fiscal. Technically market is getting support at 28536 and below same could see a test of 28423 level, And resistance is now likely to be seen at 28851, a move above could see prices testing 29053.

Trading Ideas:

Gold trading range for the day is 28423-29053.

Gold fell slightly as Wall Street rallied, but losses were limited by the euro's gain versus the dollar and caution ahead of the key U. S. nonfarm payrolls report

Draghi reiterated that euro zone borrowing costs will remain at their present or lower levels until conditions improve.

A sharp fall in the Turkish lira and rising world gold prices curbed Turkey's demand for gold in January, slashing monthly bullion imports by more than 80 percent