Gold settled flat at 29132 after climbing sharply overnight as investors continued to cheer Federal Reserve Chair Janet Yellen's commitment to tapering stimulus measures. Stimulus measures such as Fed bond purchases tend to weaken the dollar by suppressing long-term interest rates to make stocks more attractive, thus bolstering gold's role as a portfolio hedge. Gold was trading steady near its three-month high close to breaking past $1,300 an ounce as technical momentum, short-covering and hopes for a measured tapering of U. S. stimulus offset any negative impact from firmer equities. In prepared remarks to the House Financial Services Committee on Tuesday, Fed Chair Yellen suggested that the central bank would taper the pace of its asset purchases at future meetings if the economy continued to improve as expected. However, Yellen added that the pace of the central bank's bond purchases are not on a "preset course" and reiterated that the Fed plans to hold interest rates near zero "well past" the time the jobless rate falls below 6.5%. Investors have been cautiously moving back into the precious metal as seen in flows into SPDR Gold Trust, the world's largest gold-backed ETF. Holdings in the ETF rose 1.80 tonnes to 798.85 tonnes on Tuesday. The fund, which lost around 500 tonnes in 2013, has not recorded any outflows in three weeks. Physical buying from China, the world's top bullion consumer, where demand has been robust due to the Lunar New Year holiday, could ease after the recent rally in prices. Technically market is getting support at 29038 and below same could see a test of 28945 level, And resistance is now likely to be seen at 29192, a move above could see prices testing 29253.

Trading Ideas:

Gold trading range for the day is 28945-29253.

Gold settled flat as equity markets rallied after the new Fed chief painted an optimistic economic outlook that whetted investor risk appetite.

Investors have been cautiously getting back to the precious metal as seen in flows into SPDR Gold Trust.

Physical demand from China, where demand has been robust due to the Lunar New Year, could ease after the recent rally in prices