Gold rose to settle at 29605 after dropping below 229250 last week's concerning slide as traders appear to be bargain hunting with the yellow metal. Traders fled gold and other commodities last week on speculation that the Fed is debating winding down its monetary easing programs that have previously supported gold and weakened the dollar. That speculation plagued gold and sent U. S. stocks to their first weekly loss of 2013, but the U. S. dollar has gained strength over the past several weeks. Meanwhile, data from the U. S. CFTC show hedge funds and other market participants slashed their net long exposure to gold futures contracts by 40% in the week ending February 19 to 42,318 contracts. That is the biggest weekly decline since late July. Last Wednesday saw the biggest one-day outflow from the SPDR Gold Shares in 18 months. Since the start of 2013, investors have pulled over USD3 billion from the ETF, indicating that some may feel gold's 12-year bull run is nearing its end. Also Russia and Turkey both raised their gold holdings for a second consecutive month in January, data from the IMF showed on Friday, and highlighting central banks' interest in diversifying part of their reserves into bullion. Now technically market is in oversold as RSI for 18days is currently indicating 29.07, and getting support at 29548 and below could see a test of 29491 level, And resistance is now likely to be seen at 29643, a move above could see prices testing 29681.

Trading Ideas:

Gold trading range for the day is 29491-29681.

Gold gained on short covering after prices dropped as better U. S. economic outlook and indications Fed may end its stimulus program weighed.

Improving global market confidence and a Wall Street rally also hit gold's traditional safe-haven appeal.

SPDR gold trust holdings dropped by 9.64 tonnes to 1280.67 tonnes.