Gold settled down -0.63% at 28974 given up all it's morning gain as trader booked profit on higher side while Comex Gold settled at 1237.94 near a three-week high as weaker equities and robust physical demand in China supported prices, while U.S. gold futures also steadied after unusually sharp movements the session before. Long-term concerns that the Fed remains on track to continue scaling back monthly bond purchases that have supported the yellow metal since September of 2012 pressured prices lower. Reports of rising demand for gold bars and jewelry in Asia pressured prices up, especially among bargain hunters who viewed the yellow metal as an attractive buy. Past and present rounds of Fed bond purchases aim to drive recovery by suppressing long-term borrowing costs, weakening the dollar in the process and making gold an attractive hedge. The dollar took a hit earlier Monday after the ISM said its non-manufacturing PMI fell to 53.0 in December from 53.9 in November. Still, gold moved into negative territory amid concerns that economic indicators overall are improving and will continue to prompt the Fed to scale back bond purchases that have supported gold off and on since the 2008 financial crisis. Hedge funds and money managers broadly raised their net long positions in gold and silver futures and options in the week to Dec. 31, data from the CFTC showed. While Indian officials are in talks to cut a record high import duty on gold and relax rules on exports, government sources said, after the measures helped narrow the country's trade deficit and now threaten to encourage smuggling. Technically market is getting support at 28818 and below same could see a test of 28661 level, And resistance is now likely to be seen at 29204, a move above could see prices testing 29433.

Trading Ideas:

Gold trading range for the day is 28661-29433.

Gold dropped on profit booking amid rupee firmness weighed after prices earlier saw support as weaker equities and robust physical demand in China supported prices

Ben Bernanke, who steps down as head of the Fed at the end of January, gave an upbeat assessment of U.S. economy in coming quarters

Gold prices fell about 29% in 2013 amid growing expectations that the Federal Reserve will taper its USD75 billion in bond purchases this year.