Gold settled down by -0.22% at 27934 held steady below 28000 as investors eyed heightened tensions in Ukraine and awaited U.S. economic data. Trading volumes where likely to remain light on Monday, with U.S. markets closed for the Labor Day holiday. In the week ahead, Investors will be focusing on Thursday’s outcome of the ECB’s monthly monetary policy meeting, as well as Friday’s closely watched U.S. nonfarm payrolls report. Last week, gold prices hit $1,297.60 an ounce, their highest level since Aug. 20 on Thursday after Ukraine’s president said Russian troops had entered the conflict in eastern Ukraine to support pro-Russian separatists there. However, gold retreated from the day’s highs after data showed that U.S. GDP expanded at an annual rate of 4.2% in the second quarter, up from a preliminary estimate of 4% and rebounding from a first quarter contraction. Reports on Friday showed that U.S. consumer sentiment rebounded to a seven year high in August, with the final reading of the University of Michigan’s consumer confidence index rising to 82.5 from 81.8 in June. Another report indicated that manufacturing activity in the Chicago region continued to expand in August, pointing to underlying strength in the sector. The reports offset separate data showing that U.S. consumer spending unexpectedly fell 0.1% in July. The upbeat U.S. data also fuelled concerns that the deepening recovery could prompt the Fed to raise rates sooner. Higher interest rates would make gold a less attractive investment than interest-bearing assets such as Treasury bonds. Holdings in SPDR Gold Trust, have been falling recently while physical demand is also quiet. Technically market is getting support at 27905 and below same could see a test of 27876 level, And resistance is now likely to be seen at 27965, a move above could see prices testing 27996.

Trading Ideas:

Gold trading range for the day is 27876-27996.

Gold traded in a very tight range as investors eyed heightened tensions in Ukraine and awaited U.S. economic data.

Safe-haven demand in gold has been subdued, despite the recent worsening of the Ukraine crisis, due to strength in the dollar

Holdings in SPDR Gold Trust, have been falling recently while physical demand is also quiet.