Gold prices dropped and settled down by nearly Rs. 229.00 settled at 29428 as investors largely avoided the metal and opted for the dollar on sentiment little in the way of policy is battling growing headwinds. Pressure also seen from the rupee firmness as buoyed by strong gains in local stocks and dollar sales by exporters. A meeting of eurozone FM produced mixed results for the precious metal. Policymakers decided to allocate EUR30 billion in aid for Spain to prop up its banking sector by the end of the month, which was bullish for gold in that such news pressured the dollar downwards. Eurozone FM also approved plans to give Spain an extra year to meet deficit-reduction targets, with the deadline now set at 2014, which further bolstered gold. However, eurozone FM still must give eurozone bailout funds the green light to invest in Spanish and Italian bond auctions, which kept borrowing costs high in those countries and sent investors running to gold's traditional hedge, the greenback. Less than stellar trade figures out of China pushed the metal lower as well. The China reported the nation's trade surplus widened to a 3-year high of $31.7bn vs $18.7bn. However, gold saw some support on sentiment that Beijing will eventually stimulate its economy via rate cuts or other easing measures going forward, which would make gold an attractive play down the road. Now technically market is getting support at 29332 and below could see a test of 29237 level, And resistance is now likely to be seen at 29586, a move above could see prices testing 29745.

Trading Ideas:

Gold trading range for the day is 29237-29745.

Gold fell as jittery commodities investors sold on news of another U. S. futures brokerage was missing client funds.

Investment demand in gold remained lackluster despite the metal's recent price decline.

A meeting of eurozone finance ministers produced mixed results for the precious metal.