  We report Gemini-South GMOS observations of the exoplanet system WASP-29
during primary transit as a test case for differential spectrophotometry. We
use the multi-object spectrograph to observe the target star and a comparison
star simultaneously to produce multiple light curves at varying wavelengths.
The 'white' light curve and fifteen 'spectral' light curves are analysed to
refine the system parameters and produce a transmission spectrum from 515 to
720nm. All light curves exhibit time-correlated noise, which we model using a
variety of techniques. These include a simple noise rescaling, a Gaussian
process model, and a wavelet based method. These methods all produce consistent
results, although with different uncertainties. The precision of the
transmission spectrum is improved by subtracting a common signal from all the
spectral light curves, reaching a typical precision of ~1x10^-4 in transit
depth. The transmission spectrum is free of spectral features, and given the
non-detection of a pressure broadened Na feature, we can rule out the presence
of a Na rich atmosphere free of clouds or hazes, although we cannot rule out a
narrow Na core. This indicates that Na is not present in the atmosphere, and/or
that clouds/hazes play a significant role in the atmosphere and mask the broad
wings of the Na feature, although the former is a more likely explanation given
WASP-29b's equilibrium temperature of ~970 K, at which Na can form various
compounds. We also briefly discuss the use of Gaussian process and wavelet
methods to account for time correlated noise in transit light curves.
