Spot gold drifted lower below $1560 an ounce, as the Euro sinks sharply against the US dollar. Ongoing political chaos in Greece raised concerns that the crisis will spill over to other debt laden European economies threatening the very existence of the Euro and dragging it down to four month lows. Euro zone finance ministers dismissed the talk of Greece leaving the Euro zone in their yesterday’s meeting also pressured the currency. However lower prices triggered strong demand for physical gold especially from Asian countries but as per reports gold refiners are struggling to meet their orders on a sudden surge in demand. Probable Chinese bank rate announcement, US inflation numbers and GDP data are 

the key releases investors are closely watching for the rest of this week. Prices have already cleared the strong support of $1560 an ounce in the previous session. As long as prices stay below the 

same expect healthy selling pressure towards 1545 initially, followed by 1520/1480 levels later. Ongoing candlestick formation is supportive for a long liquidation, but an oversold RSI might minimize opportunities of strong selling pressure in the short term. RSI of spot gold has dragged below 15, the lowest level seen since August 2008. At the same time a turn higher from the present levels are possible with probable upsides being 1596/1620 levels. However strong reversal is favoured only in a close above 1632 with stiff volumes.

The day's bias should stay largely range bound with mild positive bias. 27700-27560 would be the range we expect initially. Unexpected rise above 27700 could register fresh upside moves towards 27750/27930, mean while on downside it would be 27500.

The uptrend seen so far during the day may not continue unless consistently trade above 53500, else we would see a choppy session  with in the range of 53500-53750 levels.

Possibilities for further gains are still in the picture. But before this  price action, we expect prices to take a dip lower towards 27470  region to involve fresh buying towards 27780/28000 then to  28130.Alternatively, successful trades below 27400 could dilute our  buying expectations and would drag down price towards 27240/27100 followed by major crucial region of 26900. Anyhow for the day we favor choppy trading with positive bias.