MUMBAI: Gold futures in India, the world's biggest buyer, are likely to gain further to hit another peak, its second since September, as a weaker dollar increases the metal's appeal as an alternative investment.
"Dollar weakness will be the most important factor. Euro would be buoyed by hopes of a Greek bailout," said Gnanasekar Thiagarajan, director of Commtrendz Research.
The euro retreated from a seven-month high against the yen as traders booked profits on its recent rally, although expectations that Greece will secure new emergency loans would check losses.
US dollar often move in opposite direction to the yellow metal as the two compete for funds globally.
The actively traded gold contract for December delivery on the Multi Commodity Exchange (MCX) was 0.51 percent higher at 34,414 rupees per 10 grams at 1218 GMT, after hitting a high of 32,464 rupees. The contract had struck a peak of 32,783 rupees on Sept. 13.
Buying is advised in gold on dips at 32,300 rupees, for a target of 32,800 rupees, with a stop loss of 32,100, said Thiagarajan.
However, slack physical demand in the peak wedding period could limit the upside in prices, analysts said.
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