Gold settled up 1.45% at 27239 hitting a six-week high and putting it on track for its biggest weekly climb since mid-January as more bad economic data from China rattled financial markets, pushing the U.S. dollar broadly lower. The FOMC appears sharply divided on whether inflation is moving close to a level it deems appropriate to start raising short-term rates. World stocks tumbled towards their worst week of the year, while the dollar index hit its lowest in two months after Chinese factory data added to doubts that the U.S. Federal Reserve will raise interest rates next month. Gold had already rebounded last week from July's 5-1/2 year low, boosted by minutes of the Fed's last policy meeting, which dented expectations for an imminent rise in U.S. rates. Gold has come under heavy pressure this year from expectations that the Fed would raise rates for the first time in nearly a decade, lifting the opportunity cost of holding non-yielding bullion while boosting the dollar. Colombia slashed its gold holdings by two-thirds last month, adjusting its reserves for the first time in years, as spot prices sank in a bullion rout, International Monetary Fund data showed. The South American country slashed its holdings by 6.5 tonnes, leaving just 3.77 tonnes, the data showed. It was the first time in at least two years the country had changed its reserves of bullion, according to sources. The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Shares, reported an inflow of 3.6 tonnes, its first rise in more than a week. Technically now Gold is getting support at 26950 and below same could see a test of 26661 level, And resistance is now likely to be seen at 27429, a move above could see prices testing 27619.

Trading Ideas:

Gold trading range for the day is 26661-27619.

Gold prices rose as more bad economic data from China rattled financial markets, pushing the U.S. dollar broadly lower.

The FOMC appears sharply divided on whether inflation is moving close to a level it deems appropriate to start raising short-term rates.

SPDR gold trust holdings gained by 0.49% i.e. 3.28 tonnes to 677.83 tonnes from 674.55 tonnes.