India gold surged tracking international market which was supported by weakness in dollar and expectation that US interest rate will not be hiked anytime soon.

The international gold was seen trading at $1,187 an ounce. On Monday, it rallied to $1,191.50 an ounce.

The yellow metal saw the upward trend after the Federal Reserve said it was cautious last on the U.S. economy and the rate-hike will depend the US economy.

Earlier, gold saw weakness as there were talks on rate hike, which would dampen the gold sentiment as investors would dump gold for other instruments.

India gold prices also rose by Rs 100 to Rs 26,550 per 10 grams at the bullion market as buying activity from jewellers and retailers increased amid a firm global trend.

Gold futures for the latest delivery on the Multi Commodity Exchange was seen trading at Rs 26,241 per 10 grams higher by 0.016 per cent at 3.20 pm IST. It touched an intra-day high of Rs 26,267 during the trade.

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