Gold settled down -0.5% at 29882 pressured by a firmer dollar and having risen nearly 1 percent in the previous session, but the precious metal was heading for its third week of gains on a patchy recovery in the global economy. Gains where capped on MCX as Rupee recovered after hitting a one-week low on Thursday as dollar sales by custodian banks aided, but losses in domestic shares and regional peers after minutes from the U. S. Federal Reserve meeting showed it would stick to its tapering schedule prevented further gains. Minutes of the Fed's latest policy meeting showed several policymakers wanted to keep cutting monetary stimulus, weighing down on gold's inflation-hedge appeal. On the physical market, market expected jewellers across Asia to buy on dips, while India's plan to keep tax on gold imports at current levels could underpin sentiment in the physical market as it will lead to more smuggling. Gold demand in India is expected to be robust in 2014 and likely to encourage an increase in smuggling if curbs on bullion imports remain, the World Gold Council has said. Assets in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, expanded 0.5 percent last week, a third straight increase and the longest rising streak since August. Holdings are up 2.45 tons in February after dropping for 13 month. Technically market is under fresh selling as market has witnessed gain in open interest by 2.03% to settled at 11260 while prices down -149 rupee, now Gold is getting support at 29788 and below same could see a test of 29694 level, And resistance is now likely to be seen at 29978, a move above could see prices testing 30074.

Trading Ideas:

Gold trading range for the day is 29694-30074.

Gold slipped as the dollar firmed after minutes from a U. S. Federal Reserve policy meeting indicated support for continued tapering of its stimulus

Prices benefited after data showed factory activity in China fell to a seven-month low and a closely watched gauge of U. S. manufacturing sector fell sharply.

India's plan to keep tax on gold imports at current levels could underpin sentiment in the physical market as it will lead to more smuggling.