Gold settled up 1.94% at 28968 in line with global prices that jumped 2 percent as bargain hunters emerged to make the most of lower prices and Comex Gold settled at 1221.87 up sharply on the first trading day of 2014 on Thursday, holding on to strong gains after data showed that the number of people who filed for unemployment assistance in the U. S. last week fell less-than-expected. Indian gold imports may fall 70 percent in the final quarter of 2013 from 255 tonnes in the year-ago period and are expected to be half the usual levels at 500-550 tonnes next year if new import rules are maintained, a top trade body official said.

Also to curb a rising trade gap, India slapped a record import duty of 10 percent on gold last year and tied imports for domestic consumption with exports. FM Chidambaram told "restraining gold imports is a good move" and that India should look to mine gold within the country to reduce its dependence on imports. While Comex Gold's gains come after it lost 28 percent in 2013, ending a 12-year bull run and posting its largest loss in 32 years, as the U. S. Fed announced plans to unwind its monetary stimulus.

New positions initiated by institutional investors at the start of the new year and some bargain hunting following the metal drop to a six-month low in the previous session triggered bullion demand. The Fed has said it will pay close attention to data when deciding on the fate of monetary stimulus programs. Also SPDR Gold Trust, said its holdings fell 3.60 tonnes to 794.62 tonnes on Thursday. Technically market is getting support at 28641 and below same could see a test of 28313 level, And resistance is now likely to be seen at 29146, a move above could see prices testing 29323.

Trading Ideas:

Gold trading range for the day is 28313-29323.

Gold seen supported after data showed that number of people who filed for unemployment assistance in U. S. last week fell less-than-expected.

The Fed has said it will pay close attention to data when deciding on the fate of monetary stimulus programs.

SPDR gold trust holding dropped by 3.60 tonnes i. e. -0.45% to 794.62 tonnes from 798.22 tonnes.