Gold settled up 1.89% at 28199 surged as investors sought shelter in the precious metal on fears of further turmoil after news that a Malaysian passenger jetliner had been downed in Ukraine. The uncertainty of the matter–whether it was shot down, terrorism, or mechanical malfunction or pilot error, spooked the market place. In overnight news, the U. S. and EU have slapped new and tough sanctions on Russia.

Russia reacted with bellicose rhetoric that has ratcheted up tensions between it and the West, regarding Russia’s annexation of part of Ukraine a few months ago. Asian and European stock markets were pressured a bit on this news. There was still more downbeat economic data released from the European Union. The bloc reported its construction spending fell 1.5% from April to May, but was up 3.5% from a year ago. The EU also reported its annual inflation rate remained at a very low 0.5% in June.

The very low inflation and weak economic numbers in the EU have prompted the ECB to inject monetary policy stimulus this summer, and more easing is likely on the way in the coming weeks. In other news, reports say India gold imports rose by 65% in June, on an annual basis, despite no movement by the Indian government to relax gold import duties. While US economic data released Thursday included the weekly jobless claims report, new residential construction, and the Philadelphia Fed business survey. This data was collectively a bit downbeat, which also worked to modestly support the gold market. Technically market is under fresh buying and getting support at 27828 and below same could see a test of
27458 level, And resistance is now likely to be seen at 28483, a move above could see prices testing 28768.

Trading Ideas:

Gold trading range for the day is 27458-28768.

Gold surged sharply higher after the Malaysian Airlines plane crash in eastern Ukraine, near the border with Russia.

A disappointing report on U. S. housing starts also contributed to gold's sharp uptick with the dollar trending lower.

SPDR Gold Trust, its holdings fell 2.69 tonnes to 803.34 tonnes on Thursday.