Gold settled up 1.05% at 29186 on Wednesday while markets where closed on Thursday on account of Independence Day's holiday. Today prices look to open with positive sentiments as support seen after the update that India's consumption of gold rose to 310 tonnes in the second quarter ended June, highest in the last 10 years, despite government curbs to restrict imports to rein in burgeoning CAD, a WGC report said on Thursday. While Comex Gold rose to a near two-month high on Thursday, gaining nearly 2.5% as a drop in the US dollar triggered short-covering and a technical breakout once prices breached key resistance at $1,350 an ounce. After trading lower earlier in the session, gold staged an impressive $50 rally as the dollar reversed gains after data gave conflicting pictures of the strength of the US economic recovery, muddying views on when the US Fed will begin trimming its stimulus measures. Speculators, who have boosted their short position on gold since its mid-April sell-off, opted to buy futures to cover their bearish bets as gold rose above the $1,350 mark, an area bullion attempted to breach several times in the past two months but failed each time. A batch of mixed economic data out of the US, sent equities there plunging and investors scurrying for safe-havens such as gold. While Holdings of SPDR Gold Trust, rose 0.2% to 913.23 tonnes, raising hopes that the worst of the outflow from the fund is over. Investors must also digest news that many top US hedge funds, including longtime bull John Paulson, have reduced, and in some cases completely disposed of, their stakes in SPDR Gold Trust. Technically market is getting support at 28880 and below same could see a test of 28575 level, And resistance is now likely to be seen at 29365, a move above could see prices testing 29545.

Trading Ideas:

Gold trading range for the day is 28575-29545.

Gold gains on hopes Fed may not scale back its bond buying soon, and as holdings at the world's top gold-backed ETF rose.

Steady dollar and stronger U. S. Treasury yields, coupled with worries the U. S. Fed may start tapering its monetary stimulus soon capped further upside

Despite the expectations that gold imports may fall, India's appetite for bullion is anticipated to pick up later in the year due to seasonal demand