Gold dropped as a report on Chinese export gains and positive comments from the U.S. Federal Reserve chief eased some of the fear that only one session before had sent the metal to record highs. Gold opened at 18978, as investor appetite for risk returned and the flight to quality trade eased. After trading within a tight range for the beginning of the day, Gold broke-out to the downside on comments from Bernanke and the rally in equities to trade at a low of 18697. Gold was able to claw back some of the days earlier losses on afternoon fund buying, but was unable to reach the days earlier highs, closing out the day down at 18789.Now support for the gold MCX is seen at 18658 and below could see a test of 18526. Resistance is now likely to be seen at 18960, a move above could see prices testing 19130.

Trading Ideas:

Gold trading range is 18526-19130.

Gold dropped as wider market optimism drained some safe-haven interest in metal.

Support for the gold is seen at 18720 and resistance is at 18860.

In spot gold looks to have a support at 1218$ and resistance at 1242$

SELL GOLD AUG @ 18850-880 SL 18956 TGT 18812-18760-18680.MCX