Mumbai: Indian gold futures were trading higher tracking firm overseas markets and near-record high oil prices, analysts said.
The precious metal for delivery in August gained Rs7 to Rs12,291 per 10 grams in late morning deals on the Multi Commodity Exchange of India. The October contract was up Rs6 to Rs12,347.
“All the fundamentals are showing bullish trend. Firm overseas market and rising oil prices are supporting the market,” said Gnanasekar Thiagarajan, director, Commtrendz Research.
Overseas gold steadied on Tuesday, hovering near its highest level in a week with any dip in the dollar likely to spur another round of buying from speculators.
Oil steadied on Tuesday after touching a record near $140 the previous day, with traders caught between a weaker dollar and expectations that top exporter Saudi Arabia will ramp up output to its highest rate in decades.
Crude oil and gold move in tandem as the former signals inflation, while the latter is a hedge against rising prices.
In macro-economic data, traders would be closely watching US building permits for May, current account reports for the first quarter and producer price index data for further direction, said Debjyoti Chatterjee, associate vice-president, MAPE Admisi Commodity Research.
The August contract on MCX is expected to trade in the Rs12,100-12,460 range, he said.
Open interest for August gold on MCX was at 7,785 lots, up from 7,412 the previous session. Volume on Monday was 43.5kg.