Gold prices in India, the world's biggest buyer of the metal, are likely to rise this week, extending gains past their highest level in four months, due to an import duty hike and dollar weakness overseas.
At 0120 GMT, the most-actively traded gold for October delivery on the Multi Commodity Exchange (MCX) was 0.27 per cent higher at Rs 29,000 per 10 grams, after hitting a high of Rs 29,333, a level last seen on April 12.
"It is unlikely that prices will go down due to government's increase in duty," said Gnanasekar Thiagarajan, director with Commtrendz Research, advising to buy gold and silver on dips.
Mr Thiagarajan also said buying is advised at Rs 28,650, for a target of Rs 29,350, with a stop loss of Rs 28,400.
On Tuesday, the government hiked the import duty on gold, for the third time in eight months, to 10 per cent from the earlier 8 per cent to curb surging imports.
The dollar climbed to a one-week high against both the euro and the yen on Tuesday after a key gauge of US consumer spending rose at its fastest pace in seven months. Gold acts as an alternative investment to the dollar.
Silver for September delivery on the MCX was 0.96 per cent higher at Rs 46,300 per kg.
Buying is advised in silver at Rs 45,700, for a target of Rs 48,000, with a stop loss at Rs 45,100, said Mr Thiagarajan.
Copyright @ Thomson Reuters 2013