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Indian gold futures, which hit a record high on Tuesday, are likely to touch the keenly watched Rs 33,000 per 10 grams mark this week, as a weakening rupee could continue to make the dollar-quoted yellow metal expensive.
Higher gold prices could dent demand in the world's biggest buyer of the yellow metal, even as traders scramble for supplies after the federal government put a quota system on imports by linking exports with domestic consumption.
The most-active gold for October delivery on the Multi Commodity Exchange (MCX) was 2.11% higher at Rs 32,549 , after hitting a record of Rs 32,677 , breaching its previous record hit in November last year.
"The main reason would be rupee depreciation and high crude prices," said Gnanasekar Thiagarajan, director with Commtrendz Research.
The rupee breached the 65.56 per dollar mark to hit a record low, as a steep decline in the domestic share market following the approval of the food security bill in the lower house of parliament hurt sentiment.
The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.
Buying is advised on dips to Rs 32,400, with a stop loss at 32,200, targeting 33,000, said Thiagarajan.
Silver for September delivery on the MCX was 2.54% higher at Rs 55,155 per kg.
Buying is advised in silver at Rs 5,800 , with a target at Rs 57,000 , and a stop loss at Rs 55,100 , said Thiagarajan.
