Gold dropped marginally and settled down by -0.11$ at 31400 after solid housing and confidence data out of the US wiped out gains from reports of rising central bank demand for gold. A Fed board member blasted a recent Fed decision to stimulate the economy with monetary easing measures, which also pushed gold down. Gold prices rose earlier on reports that central banks around the world have been adding to their gold reserves. An IMF report revealed that central banks increased their holding of the precious metal in both July and August, with South Korea raising its gold holdings by nearly 16tns in July. Solid data out of the US sent the metal falling as investors stocked up on dollar positions. The S&P’s/Case Shiller HPI showed that home price in 20 cities rose 1.2% in July of this year compared with the same month a year ago. Separately, Fed Reserve Bank of Philadelphia President, a noted inflation hawk, said earlier that a decision to roll out a third round of QE to encourage investing and hiring won't work in that households and businesses would rather pay down debts than take on new leverage. Now technically market is getting support at 31333 and below could see a test of 31267 level, And resistance is now likely to be seen at 31493, a move above could see prices testing 31587.

Trading Ideas:

Gold trading range for the day is 31267-31587.

Gold dropped after solid housing and confidence data out of the U.S. wiped out gains

IMF report revealed that central banks increased their holding of the precious metal in both July and August

SPDR Gold Trust said its holdings had risen to a record high of 1,331.331 tonnes by Sept. 25