Gold rallies nearly 4 months highest on Tuesday as investors were awaiting policy meeting of the European Central Bank on Thursday that could see the submission of a stimulus package of bond buying.
Bullion, propped up by safe-haven bids in market volatility supplied by uncertainty over the economy and global growth concerns in Europe.
On the Comex New York, gold futures for February delivery hit a session high of $1,294.30 a troy ounce. A day earlier, gold futures dropped $1.30, or 0.1%, to trade at $1,275.60 a troy ounce.
Spot gold remained stable at $ 1277.16 an ounce, after weakening 0.2 percent on Monday.
The metal had jumped to a maximum of $ 1281.50 September Friday following an extensive market landslide driven by sudden movement of Switzerland gave a cap on the franc.
The euro was pressurized amid growing expectations that the ECB will board a program of quantitative easing up on Thursday in a bid to avert the threat of deflation in the euro zone.
The Sunday’s elections in Greece, where the anti-bailout Syriza party still in lead in the polls, has also added to market jitters.
The global uncertainties have seen investors piling on to gold. Holdings in SPDR Gold Trust, climbed 13.7 tonnes to 730.89 tonnes on Friday, its biggest one-day inflow in nearly 3-1/2 years.
At the Indian domestic markte gold futures traded higher taking positive cues from global markets. At the Multi Commodity Exchange, gold for delivery in February was up by Rs 98, or 0.36%, to Rs 27,798 per 10 grams.
Asian equities were higher after the Chinese data, while the dollar ticked up on weakness in the euro, keeping bullion’s gains in check.
Rising for the fourth straight session, India’s equity markets closed at record highs. FIIs have accelerated their purchases in the Indian debt market on account of easing inflation and the expectation of further rate cuts by the Reserve Bank of India (RBI).
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