Gold settled up 0.68% at 28554 rose for the first time in four days on Friday, as investors returned to the market to seek cheap valuations in wake of recent losses which took prices to six-month lows. Investors liquidated long positions after the Federal Reserve announced plans on Wednesday to begin tapering its monthly bond-buying program. The Fed said that it would reduce its USD85 billion-a-month bond buying program by USD10 billion in January. In his last press conference as Fed Chairman Ben Bernanke said the economy was continuing to make progress. The move came after months of uncertainty surrounding the future of the Fed's asset-purchase program. When market players started to anticipate the possibility of a reduction in stimulus early in the summer, it resulted in a sharp selloff in gold prices. Meanwhile, on Friday, the Commerce Department said that the U. S. economy expanded by 4.1% in the third quarter, well above initial estimates for 3.6% growth, adding to signs that the economic recovery is deepening. Gold is down approximately 29% this year, on track for its largest annual loss in 32 years, as solid U. S. economic data underlined expectations the Fed will begin curbing stimulus. In the week ahead, the U. S. is to release key reports on durable goods orders, new home sales and jobless claims. Meanwhile Hedge fund managers cut their bullish bets on gold only modestly this week before the first-ever tapering of the U. S. monetary stimulus sent the precious metal's price to six-month lows, data released on Friday showed. Also SPDR Gold Trust ETF, said its holdings rose 5.40 tonnes to 814.12 tonnes on Friday. Technically market is getting support at 28337 and below same could see a test of 28120 level, And resistance is now likely to be seen at 28710, a move above could see prices testing 28866.

Trading Ideas:

Gold trading range for the day is 28120-28866.

Gold ended with gains rebounding on short covering but still seen under pressure as Fed's plan to scale back its monetary stimulus weighed.

The Fed said last week that the U. S. economy was strong enough to scale back its massive bond-buying stimulus

SPDR gold trust holdings rose by 5.40 tonnes to 814.12 tonnes from 808.72 tonnes.