Gold settled flat at 29288 after touching its highest level in nearly six weeks with a lower dollar and a dip in equities boosting investor confidence in the yellow metal. Investors continued to watch U.S. data points for clues on the future course of monetary policy and to help assess the timing for a further reduction in the Fed’s bond purchasing program. U.S. housing starts fell 9.8% last month, more than the 8.3% decline forecast by market player. US building permits rose less-than-expected in December, but remained close to November’s five year highs. Separate reports showed that U.S. industrial production rose 0.3% in December, increasing for the fifth consecutive month, while consumer sentiment declined in January. As a gauge of investor sentiment, data from the CFTC showed on Friday that hedge funds and money managers raised their bullish bets on gold and silver futures and options for a third week amid a decline in equities. Holdings in SPDR Gold Trust, the world's largest gold-backed ETF, rose 7.49 tonnes to 797.05 tonnes on Friday, the first increase in a month. Due to the recent rally in gold prices, Chinese gold demand, which has been robust ahead of the Lunar New Year holiday at the end of the month, has come off slightly as seen in premiums and volumes on the Shanghai Gold Exchange. Technically market is under short covering as market has witnessed drop in open interest by -0.39% to settled at 8071 while prices up 23 rupee, now Gold is getting support at 29236 and below same could see a test of 29184 level, And resistance is now likely to be seen at 29365, a move above could see prices testing 29442.

Trading Ideas:

Gold trading range for the day is 29184-29442.

Gold settled flat with a lower dollar and a dip in equities boosting investor confidence in the yellow metal.

Due to the recent rally in gold prices, Chinese gold demand, which has been robust ahead of the Lunar New Year holiday at the end of the month

Chinese gold imports, the lone bright spot in an otherwise disastrous year for bullion in 2013, look set to fall from last year's record levels