Gold settled down -0.31% at 29150 due to technical weakness and strength in the dollar. Bullion's positive start to 2014 looked to be fading due to the prospects of an improving U. S. economy and expectations for further Federal Reserve stimulus reduction. Gold's repeated failure to break above key technical resistance at $1,260 an ounce prompted investors to take profits. On Tuesday, gold reversed early gains to end nearly 1 percent lower for its biggest one-day drop so far this year. A stronger dollar also triggered profit-taking in the precious metal. Market are concerns about further trimming of U. S. central bank stimulus, which weighed on prices last year, were back on the agenda. The Federal Reserve holds its next policy meeting on Jan. 28-29 when markets think the U. S. central bank will announce a second cut to its massive monthly bond purchases, which had burnished gold's inflation-hedge appeal. Since the 2008 financial crisis, the Federal Reserve has rolled out three rounds of quantitative easing to prop up the economy. The current program began in September of 2012 and saw the Fed initially buy USD85 billion in Treasury holdings and mortgage debt a month from financial institutions. Meanwhile SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 1.20 tonnes to 795.85 tonnes on Wednesday. Technically market is under long liquidation as market has witnessed drop in open interest by -2.27% to settled at 7620 while prices down -91 rupee, now Gold is getting support at 29088 and below same could see a test of 29026 level, And resistance is now likely to be seen at 29245, a move above could see prices testing 29340.

Trading Ideas:

Gold trading range for the day is 29026-29340.

Gold seen under pressure on speculation about further cuts to U. S. stimulus measures and an improving outlook for the global economy.

Gold started 2014 on a positive note but worries over stimulus cuts, which weighed on prices last year, are catching up

SPDR gold trust holding dropped by 1.20 tonnes i. e. -0.15% to 795.85 tonnes from 797.05 tonnes.