Gold futures surged by more than 1 per cent in the domestic market on Tuesday tracking a bullish trend in the overseas market as a renewed drop in crude oil prices amid fears that OPEC members won't cut output, and fresh China Yuan devaluation rekindled fears over a faltering global economic recovery, causing a flight from risky assets such as equities and spurring demand for safe haven avenues such as the yellow metal.
Gold also received support from hopes that the US Federal Reserve may delay further interest rate tightening amidst signs of a slowdown in the world's biggest economy and ongoing financial market volatility, bolstering the lure for the bullion as a store of value.
Gold may extend a rally today as weakness in equities persisted as oil prices extended a drop.
At the MCX, Gold futures for April 2016 contract closed at Rs 29,302 per 10 gram, up by 1.16 per cent after opening at Rs 29,000, against the previous closing price of Rs 28,966. It touched the intra-day high of Rs 29,397.