Gold yesterday settled up 2.34% at 28277 as prices got support on account of short covering ahead of expiry also rupee fell for the first session in four on Monday on the back of dollar demand from oil importers and caution ahead of a central bank policy review that may give cues about its stance after recent measures to defend the currency. The Reserve Bank of India is widely expected to keep rates and the cash reserve steady when it unveils monetary policy on Tuesday. Forex dealers will keenly watch, instead, if the central bank indicates more measures to stabilise the currency or gives a timeframe for its current action. While COMEX Gold traded modestly lower as traders appeared cautious ahead of the Federal Reserve's Wednesday announcement on monetary policy. Gold futures up 8.6%, a rally aided in larger part by comments from Federal Reserve Chairman Ben Bernanke that the Fed's monetary policy will remain easy for the foreseeable future. That rally has some market participants believing gold can continue higher. Also data from the US CFTC showed hedge funds and other money managers boosted their long bets on gold by 26% to almost 70,100 options and futures contracts for the week ending July 23. In U. S. economic news out Monday, the National Association of Realtors said its Pending Homes Sales Index fell 0.4% to 110.9 in June and the May reading was revised lower to 111.3 from 112.3. Meanwhile Gold premiums in India, the world's biggest buyer, jumped to $25-30 an ounce on London prices due to the scarcity of the metal ahead of a series of festivals and import restrictions. Now Gold is getting support at 27738 and below same could see a test of 27199 level, And resistance is now likely to be seen at 28630, a move above could see prices testing 28983.

Trading Ideas:

Gold trading range for the day is 27199-28983.

Gold gained after attention turned to a U. S. Fed's meeting, which is expected to reaffirm its stance to keep interest rates near zero.

Comments from Bernanke this month have reassured investors that the central bank will be slow to scale back monetary stimulus

The Fed's policy setting FOMC begins its two-day meeting on Tuesday and is expected to release its latest statement on Wednesday.