Gold settled flat at 27519 as the dollar's recent rally faded and investors awaited clearer signs from the U.S. Federal Reserve that it is on track to raise U.S. interest rates next year. Gold prices turned lower after U.S. Fed policymaker Jeffrey Lacker said he sees inflation firming this year. Minneapolis Fed President Narayana Kocherlakota later warned that the labor market has a long way to go until the U.S. central bank reaches its goal. The market is awaiting the release of minutes from the Fed's June policy meeting on Wednesday to gauge the central bank's view on interest rates and economic strength. The dollar eased against a basket of currencies, having touched its highest in almost two weeks in the previous session.  Investors said a lack of support from physical markets could weigh on prices, however, tensions in the Middle East and Ukraine are ensuring that there is still some demand for gold as insurance against geopolitical risk. A strong U.S. non-farm payrolls report last week pressured gold prices, with speculation that Fed could increase rates as soon as the first quarter of 2015. SPDR gold trust holdings gained by 2.09 tonnes i.e. 0.26% to 800.28 tonnes from 798.19 tonnes. However, geopolitical tensions in the Middle East and Ukraine are ensuring that there is still some safe-haven demand for gold. A strong U.S. jobs report stoked fears of an earlier-than-expected rate hike in the world's largest economy. Technically market is under short covering as market has witnessed drop in open interest by -1.16% to settled at 8586 while prices up 29 rupee, now Gold is getting support at 27391 and below same could see a test of 27262 level, And resistance is now likely to be seen at 27639, a move above could see prices testing 27758.

Trading Ideas:

Gold trading range for the day is 27262-27758.

Gold settled flat as dollar's recent rally faded and investors awaited clearer signs from the Fed that it is on track to raise U.S. interest rates next year.

A strong U.S. non-farm payrolls report last week pressured gold prices, with speculation that Fed could increase rates as soon as the first quarter of 2015.

SPDR gold trust holdings gained by 2.09 tonnes i.e. 0.26% to 800.28 tonnes from 798.19 tonnes.