Gold on MCX settled down -0.26% at 28945 pressured by comments from Federal Reserve Chair Janet Yellen that reinforced expectations of an increase to U.S. interest rates this month. However, traders said that geopolitical tensions created by North Korea firing four ballistic missiles into the sea off Japan's northwest coast were supportive to bullion. Yellen said last week that the Fed was poised to lift benchmark U.S. rates provided jobs and inflation data held up, comments seen as cementing plans for an increase at the Fed's March 14-15 meeting.
Higher U.S. rates would boost the U.S. currency and make dollar-priced commodities more expensive for holders of other currencies. The market will also await monetary policy decisions from the European Central Bank. Physical gold holdings in exchange-traded funds have fallen since last week, partly because of the stronger dollar, but at 54.855 million ounces are still more than 3 percent higher than at the start of February.
New orders for U.S.-made goods increased for a second straight month in January, suggesting the recovery of the manufacturing sector was gaining momentum. Holdings of the SPDR Gold Trust), the world's largest gold-backed exchange-traded fund, fell 0.45 percent to 836.77 tonnes on Monday.
Technically market is under long liquidation as market has witnessed drop in open interest by -3.88% to settled at 5892 while prices down -75 rupees, now Gold is getting support at 28849 and below same could see a test of 28753 level, And resistance is now likely to be seen at 29115, a move above could see prices testing 29285.