Prices of US gold futures rallied sharply in trading on Tuesday, repositioning at the highest level since March 2014, when the dollar firmed, as well as expectations of a rise in the interest rates in the short term US lost momentum after disappointing figures for US growth last week.
Gold for December delivery on the Comex rose to an intraday peak of $1,370.15 a troy ounce, the most since July 11, when prices surged to a more than two-year high of $1,377.50.
Spot gold inched down 0.3 per cent to $1,348.46 an ounce, after closing up 0.2 per cent at $1,352.85 on Monday.
The US dollar index, which measures the dollar versus a basket of six currencies, rose 0.1 percent to 95.824, after being dropped to a low of 95.384 last week when it posted its biggest loss in three months.
Holdings of SPDR Gold exchange-traded fund, rose 0.62 percent to 964.03 tonnes on Monday.
At the Multi Commodity Exchange, gold for delivery in August shed Rs 74, or 0.23 per cent, to Rs 31,460 per 10 grams as participants cut bets amid a weak global trend.
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