Gold traded in the range and settled flat at 31321 as pressure seen with ongoing concerns over Spain and Greece boosted demand for the dollar and lingering worries over the health of the global economy also weighed on sentiment. Also a stern warning by the IMF on global growth and worries about a slowing Chinese economy lessened bullion's appeal as an inflation hedge. Bullion traded lower after remarks by China's central bank governor that China will keep monetary policy flexible and pre-emptive to support an economy still facing relatively big downward pressure. China's central bank would flood money markets through reverse bond repurchase agreements for a second straight trading week. Gold tends to weaken on signs of slowdown in China and often considered one of the top drivers of global growth. Gold's drop was limited by a sharp rally in crude oil prices due to supply worries driven by heightened geopolitical tensions in the Middle East. Reflecting continued investor demand for gold against a worsening economic backdrop was another inflow of metal into ETP, which brought global holdings to a fresh record. Higher prices have curbed physical demand in Asia, especially as a global slowdown has started to impact the economies in the key gold consumers in the region, including China and India. Now technically market is getting support at 31249 and below could see a test of 31178 level, And resistance is now likely to be seen at 31410, a move above could see prices testing 31500.

Trading Ideas:

Gold trading range for the day is 31178-31500.

Gold dropped from highs as a stern warning by the International Monetary Fund on global growth

German Chancellor Angela Merkel was to travel to Athens for talks with Greek political leaders.

Uncertainty over whether Spain will soon request a full scale sovereign bailout also remained.