Gold settled up 1.44% at 29535 tracking gains with Comex Gold which settled at $1,260.71 an ounce trading near its three-week high on Wednesday, boosted by short-covering by funds and technical buying, and as the dollar continued to weaken against the euro. Dollar weakness usually benefits precious metal, such as gold and silver, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies. Investors appeared to shrug off concerns the Federal Reserve might start tapering its bond-buying program at its upcoming policy meeting. St. Louis Fed Bank President James Bullard said Monday tapering will become increasingly likely as long as the labor market continues to improve, while Dallas President Richard Fisher said that rising long-term U. S. Treasury yields suggest that investors are expecting a reduction in stimulus. The central bank is scheduled to meet December 17-18 to review the economy and assess monetary policy. Funds have been buying to cover short positions ahead of the Federal Reserve's policy meeting next week. A break above strong resistance at $1,250 an ounce also triggered heavy buy orders. SPDR gold trust holdings remains unchanged at 835.71 tonnes after dropping by 3.00 tonnes on Friday from 838.71 tonnes. Technically market is under fresh buying as market has witnessed gain in open interest by 5.41% to settled at 9631 while prices up 418 rupee, now Gold is getting support at 29291 and below same could see a test of 29048 level, And resistance is now likely to be seen at 29676, a move above could see prices testing 29818.

Trading Ideas:

Gold trading range for the day is 29048-29818.

Gold rose boosted by technical buying and funds' short-covering in thin trade ahead of the Federal Reserve's December policy meeting

Federal Reserve officials gave fresh warnings about a potential stimulus reduction on Monday.

St. Louis Fed Bank President James Bullard said tapering will become increasingly likely as long as the labor market continues to improve