Indian gold futures, which rose to their highest level in more than a week on Tuesday, are likely to extend gains bolstered by a weaker dollar overseas, though volumes are expected to remain lower on jewellers strike, analysts said.
The most-active gold for April delivery on the Multi Commodity Exchange (MCX) was flat at Rs 28,360 per 10 grams, reversing from an early high of Rs 28,425, a level last seen on March 16.
"Gold will go up due to a weaker dollar and increase in risk appetite after Fed reassured easy monetary policy," said Gnanasekar Thiagarajan, director with Commtrendz Research.
Buy gold on dips to Rs 28,200, with a stop loss of 28,000, targeting 28,600, said Thiagarajan.
The dollar held near a one-month low against a basket of currencies on Tuesday after Federal Reserve Chairman Ben Bernanke signalled that a supportive monetary policy would remain and kept alive hopes of more monetary stimulus for the US economy.
Gold and dollar often move in opposite directions as the two compete for funds globally.
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Volumes are likely to be muted as jewellers, who hedge their positions on the futures platform, continued their protest against the government levy.
Silver for May delivery on the MCX was steady at Rs 27,720 per 10 grams.
Buy silver on dips to 57,500/57,550 for a target of Rs 58,000/58,500, said Pranav Mer, senior analyst with Mangal Keshav Commodities.