Gold fell on a dollar rally, tamer inflation data and year-end book-squaring more than offset safe-haven buying after ratings agency Moody's said it may downgrade Spain's debt rating. Gold prices also moved lower after a Labor Department report showed inflation rose slower than expected in November. Renewed contagion risks from the euro zone debt crisis failed to drive gold higher after Moody's placed Spain's Aa1 ratings on review for a possible downgrade, a reminder that fiscal problems in Europe are far from over. Now support for the gold MCX is seen at 20574 and below could see a test of 20517. Resistance is now likely to be seen at 20704, a move above could see prices testing 20777.

Trading Ideas:

Gold trading range is 20517-20777.

Gold fell as dollar rise offsets unease over Spain

Gold looks to take support at 20575 and resistance at 20700.

Spdr gold trust holdings fell by 0.60 tonnes to 1286.19 tonnes