``Gold snapping the psychological key USD 1,700-level for the first time in a month as profit takers hit with a vengeance as heavy fund liquidation and options related selling sent bullion prices below a key technical support and on MCX settled with a fall near to 1.07% at Rs 31,366. US lawmakers in Washington aimed at resolving the looming fiscal cliff crisis continued to weigh on market sentiment. Markets participants continued to monitor developments surrounding the looming "fiscal cliff" in the US, approximately USD 600 billion in automatic tax hikes and spending cuts due to come into effect on January 1, unless a divided Congress and the White House can work out a compromise in the four weeks left before the deadline. There are fears that US lawmakers will repeat the same political divisiveness that led Standard & Poor's to downgrade the US's AAA rating in August 2011 and tip the country back into a recession.``
Commenting on the outlook, Ajay Kumar Kedia, director, Kedia Commodity Comtrade said, ''Gold investors are now focusing on the outlook for US non-farm payrolls data on Friday, due to the link between job creation and monetary policy. Continued weak job creation numbers could mean the Fed's monthly buyback of USD 40 billion in mortgage-backed securities would likely continue in the near term. Another round of aggressive Fed asset buyback and possible economic stimulus from the Bank of Japan could lift gold prices. Technically, MCX gold is getting support at Rs 31,211 and below could see a test of 31,055 level, And resistance is now likely to be seen at 31,656, a move above could see prices testing Rs 31,945.''