Gold settled down -0.71% at 26986 extended losses to trade near a 7-1/2 month low on Friday, poised to post its worst week in more than three months as a stronger dollar and easing tensions in Ukraine curbed appetite for safe-haven bullion. A dismal August jobs report has markets fearing the U.S. recovery may stall after a few months of robust growth. Nevertheless, speculation that the Federal Reserve might hike interest rates ahead of schedule and the subsequent strength in the U.S. dollar has hurt gold prices. In some disappointing economic news, a report from the Labor Department on Thursday showed initial jobless claims in the U.S. unexpectedly saw some further upside in the week ended September 6. On Wednesday, gold futures ended at a three-month low on a strong dollar amid speculation of a Fed rate hike soon, even as weakness in global equities helped prevent bigger daily losses. In economic news from the U.S., data from the Labor Department showed initial jobless claims to have climbed to 315,000 in the week ended August 30, an increase of 11,000 from the previous week's revised level of 304,000. Markets also await the outcome of the U.S. Fed's two-day policy meet scheduled to take place on September 16 - 17. It is widely expected the Federal Reserve will cut its monthly bond-buying program by $10 billion, with expectations of probable clues as to when it may hike interest rates. While Holdings of SPDR Gold Trust, moved higher to 788.72 tons on Thursday from its previous close of 785.72 tons. Technically market is under long liquidation and getting support at 26877 and below same could see a test of 26769 level, And resistance is now likely to be seen at 27169, a move above could see prices testing 27353.

Trading Ideas:

Gold trading range for the day is 26769-27353.

Gold dropped as the dollar hovered around a 14-month high, in the wake of the easing of tension in Ukraine.

U.S. President Barack Obama authorized air strikes against Islamic State militants in Syria.

SPDR gold trust holdings dropped by -0.32 tonnes i.e. 0.04% to 788.40 tonnes from 788.72 tonnes.