Gold settled down -0.28% at 27996 as pressure seen after a fresh batch of upbeat U.S. economic indicators but downside seen limited due to escalating tensions in eastern Ukraine. Investors remain on edge over tensions between Russia and Ukraine after Ukraine said that Russia had moved troops into the country. However, the impact of the escalating conflict has not been enough to sustain gold price increases. A recent run of positive U.S. data has fuelled speculation the Federal Reserve will further pare its gold-friendly monetary stimulus measures, removing support from the precious metal. U.S. consumer sentiment rose in August, while an index of current economic conditions hit its highest since July 2007, a survey released on Friday showed. The physical market in Asia saw purchases from jewellery makers this week, but buying interest began to subside as prices improved slightly. Net gold flows into China from Hong Kong dropped to 22.107 tonnes in July versus 40.543 tonnes in June, the lowest in three years, data showed. July's final reading came in at 81.8, and the uptick in the final August reading bolstered the dollar by keeping expectations firm that the Federal Reserve will close stimulus programs around October and hike interest rates some time in 2015. The Thomson Reuters/University of Michigan revised consumer sentiment index came in at 82.5 this month, up from a preliminary reading of 79.2 and exceeding expectations for a reading of 80.1.Technically market is under long liquidation as market has witnessed drop in open interest by -1.02% to settled at 9563 while prices down -79 rupee, now Gold is getting support at 27907 and below same could see a test of 27819 level, And resistance is now likely to be seen at 28060, a move above could see prices testing 28125.

Trading Ideas:

Gold trading range for the day is 27819-28125.

Gold dropped as pressure seen after a fresh batch of upbeat U.S. economic indicators but downside seen limited due to escalating tensions in eastern Ukraine.

A recent run of positive U.S. data has fuelled speculation the Fed will further pare its gold-friendly monetary stimulus measures.

SPDR gold trust holdings dropped by 0.60 tonnes i.e. 0.08% to 795.00 tonnes from 795.60 tonnes.