Gold settled up 0.60% at 26139 carried Monday's gains into Tuesday to settled at 1259.74 as investors snapped up positions to hedge against a weaker euro, though gains were limited due to a lack of fresh steering currents to move gold in one direction or the other. The ECB's recent decision cut interest rates continued to weigh on the euro, which bolstered gold's appeal as a hedge. The ECB cut its benchmark interest rate last week to a record-low 0.15% from 0.25%, cut its deposit rate to -0.1% and said it will support the banking sector to spur lending via targeted long-term credit injections. Still, gold's gains were limited to due to a strengthening dollar, which historically trades inversely with the precious metal. Gold was swinging between small gains and losses throughout last week. From the positive side, the yellow metal drew some strength from solid demand from central banks – according to the latest IMF report, central banks of Kazakhstan, Turkey and Belarus have increased their holdings so far this year. Furthermore, India, may increase gold imports as the government is likely to ease import restrictions. In May 2013, India had seen record gold import of 161 tonnes. This had led to sharp reactions from policymakers, with the RBI putting stringent restrictions on import. It is estimated gold import in May'14 stood at 35 tonnes, in line with the trend seen in the past few months, when imports have been about 40 tonnes. Now, it is being hoped some restrictions on gold import will be removed. Technically market is under short covering and getting support at 26006 and below same could see a test of 25872 level, And resistance is now likely to be seen at 26219, a move above could see prices testing 26298.

Trading Ideas:

Gold trading range for the day is 25872-26298.

Gold prices gained but gains were likely to remain limited as investors remained on the sidelines amid a lack of fresh trading cues.

Investors continued to digest the implications of monetary easing move by ECB and U.S. jobs data which was largely in line with expectations.

The ECB's recent decision cut interest rates continued to weigh on the euro, which bolstered gold's appeal as a hedge.