Gold settled up 1.49% at 28787 as U. S. lawmakers and President Barack Obama remained unable to clinch a deal to reopen the government and avert a looming default. Talks have been largely fruitless since what appeared to be a breakthrough on Thursday. Lawmakers said they still thought they could reach an agreement in the coming hours, and traders said that optimism kept gold from rising further. The Congress has until Oct. 17 to raise the debt ceiling, or risk defaulting. But the situation has not lifted gold anywhere near the record highs it hit the last time tension emerged over talks to lift the U. S. debt ceiling, in 2011. Gold has not seen much safe-haven bidding over the last two weeks, with parts of the U. S. government shut down. Instead, prices have slid on large sell orders, amplified by technical selling. Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund and a gauge of investor sentiment, fell 5.40 tonnes to 890.98 tonnes on Friday. Earlier this month, another big trade sent gold lower by $25 an ounce in a short time. This year, the metal has lost nearly a quarter of its value on expectations the U. S. Federal Reserve will soon end the stimulus program that had encouraged gold buying among investors concerned about low interest rates and potential inflation. Technically market is under short covering as market has witnessed drop in open interest by -4.71% to settled at 7702 while prices up 422 rupee, now Gold is getting support at 28400 and below same could see a test of 28014 level, And resistance is now likely to be seen at 29122, a move above could see prices testing 29458.

Trading Ideas:

Gold trading range for the day is 28014-29458.

Gold rose as some safe-haven buying emerged as the U. S. moved closer to a deadline to raise the national debt ceiling or risk a sovereign debt default.

U. S. lawmakers and President Barack Obama remained unable to clinch a deal to reopen the government and avert a looming default.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 1.85 tonnes to 889.13 tonnes