Gold Futures in India edged higher on Tuesday tracking overseas trend as demand from traders and speculators created fresh positions after the precious metal surged in the overseas market.
At the Multi Commodity Exchange, gold for delivery in February contracts was up by Rs 171, or 0.63 per cent, to Rs 27,201 per 10 grams. It touched an intra-day high of Rs 27,262 during the trade.
International gold rose on the back on weakness in equities and continued drop in oil prices. Weaker oil prices usually tend to hurt gold sentiment as it is considered as hedge against inflation. But fall in equities due to drop in oil prices and its economic impact supported the yellow metal. International spot gold was seen at $1,240 an ounce, at three month high.
Gold, which is considered as an alternative to other riskier assets tend to benefit from weakness in dollar equities ad investors wold focus more on the yellow metal.
May investors are not convinced that gold could hold the gains through the year. However, strong data from US and strength in dollar would weigh on gold sentiment.