MCX Gold plummeted sharply yesterday, dripping nearly Rs 300 to settle at its three week low of Rs 18548 per 10 grams as there was a flurry of sell off in global markets after the prices came under the $1250 per ounce mark and the US dollar rallied from lows near 1.2460. The bullion failed to bounce back much in New York but rose from a low of $1233 per ounce in Asia as the euro edged up above 1.2300 against the dollar after China's central bank set the Yuan's daily mid-point at its strongest since a 2005 revaluation. Traders are reluctant to sell gold as it looks like that $1200 has now established itself as a very strong support on the lower spectrum. There is also a growing speculation that dollar may not rise much in an ultra low interest rate environment in the US. The Federal Reserve's two-day policy meeting begins on Tuesday and some dealers are increasingly convinced the U.S. central bank will leave its policy rate target in the zero to 0.25 percent range until the middle of 2011. COMEX Gold currently quotes at $1240 per ounce, at the previous close only. MCX Gold fell after breaking under s 18800 mark and traders should watch out for a test of Rs 18600 on the higher side today. A break above may bring in some buying. Otherwise, expect a slide to lows of Rs 18460-480.

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