Mumbai: Indian gold futures fell on Tuesday tracking weakness in overseas markets and on falling crude oil prices, analysts said.
“The overall sentiment is weak due to falling oil prices,” said Harish Galipelli, head of research, Karvy Comtrade Ltd.
Oil dipped below $112 a barrel on Tuesday before recovering slightly, dragged down by a weak economic outlook for the US and Europe.
Crude oil and gold move in tandem as the former signals inflation, while the latter is a hedge against rising prices.
“A weakness in overseas market also contributed to the fall,” said Devarsh Vakil, head of research, Anagram Capital Ltd.
Overseas gold fell after rising more than 1% in New York, which shows the metal remains vulnerable to gains in the dollar. It was well below a lifetime high of $1,030.80 hit in March.
In macro-economic data, traders would be closely watching US housing starts and building permits for July, along with currency markets to check further direction of the bullion, they said.
“The October contract on MCX is expected to trade in the range of Rs11,280-11,500 during the day,” Vakil said.
Open interest for October gold on MCX was at 12,311 lots, down from 12,628 previous session. Volume on Monday was 64.9 kg.