Gold futures on the COMEX division of the New York Mercantile Exchange finished higher Tuesday as a weaker U.S. dollar increased demand for the precious metal as an alternative investment.
The most active gold contract for December delivery rose 6.9 dollars, or 0.51 percent, to settle at 1,372.6 dollars per ounce. Gold prices have now posted gains in eight out of the last 10 trading sessions.
The greenback's rally this year, up 3.7 percent through Monday, contributed to a 19 percent drop in gold. Market analysts say, the U.S. dollar is supporting the gold market Tuesday, as the Bloomberg Dollar Index, a gauge against 10 major currencies, fell as much as 0.4 percent, declining for the first time in three sessions, according to reports.
Furthermore, some analysts believe, gold has been driven by a mix of strong Asian physical demand and technical short covering, while the U.S. Federal Reserve policy was also the center of attention, with the Federal Open Market Committee meeting minutes due on Wednesday.
In India, Tuesday marks the beginning of the Hindu festival Raksha Bandhan, which is usually a good time for Indians to buy gold.