Gold settled down -0.35% at 27925 sharply lower on disappointing data from the U.S. with initial claims for unemployment benefits rising more than expected last week. With the U.S. gross domestic product growing more than expected in the second quarter, gold found little support as a safe haven, even as global equity markets slumped. Gold futures dropped about 3.1% in July. Investors also mulled over the prospects of the U.S. Federal reserve hiking interest rates to fight inflation with the economy improving. In economic news, a Labor Department report showed first-time claims for U.S. unemployment benefits rebounded in the week ended July 26, with initial jobless claims bouncing off the 14year low seen in the previous week. A report from MNI Indicators showed Chicago-area business activity unexpectedly grew at a substantially slower rate in July, with the business barometer falling to its lowest level in a year. Gold prices were also weighed down after U.S. GDP grew 4% in the Q2 following a revised 2.1% decrease in the Q1. On Wednesday, gold futures ended lower, on some upbeat U.S. economic data with the country's GDP growing more than expected in the second quarter. In physical market Chinese gold jewellery demand fell for the first time in eight years in the second quarter and could drop as much as 20% in the full year. Also India is scrambling to crack down on a new gold smuggling tactic that it fears could accelerate a flood of illegal imports of the precious metal into the world's second-biggest buyer. Technically market is under fresh selling and getting support at 27826 and below same could see a test of 27728 level, And resistance is now likely to be seen at 28051, a move above could see prices testing 28178.

Trading Ideas:

Gold trading range for the day is 27728-28178.

Gold dropped headed for a third straight weekly loss, as U.S. economic optimism offset any safe-haven demand.

Disappointing data from the U.S. with initial claims for unemployment benefits rising more than expected last week.

Investors were now awaiting U.S. nonfarm payrolls data, even as they were keeping an eye on geopolitical tensions in the Middle East.