Indian gold futures are likely to surge past their highest level in two weeks, helped by expectations of a further depreciation in the rupee.
The most-active gold for August delivery on the Multi Commodity Exchange (MCX) hit a high of 29,397 rupees per 10 grams, a level last seen on July 11. At 9:26 GMT, gold was trading up 0.26 percent at 29,354 rupees per 10 grams.
"Gold will undoubtedly find support from the rupee's depreciation, and also, some support from Russian central bank buying," said Gnanasekar Thiagarajan, director with Mumbai-based Commtrendz Research.
Buying is recommended in gold on a dip to 29,250 rupees, for a target of 29,400-29,500 rupees, with a stop loss at 29,100 rupees, said Thiagarajan.
The rupee, which hit its lowest level in a week, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
In the overseas market, Russia's central bank raised its gold reserves by 6.2 tonnes to 836.3 tonnes in June. Central-bank buying has underpinned gold's rallies in the last several years.
Silver futures, which traded steady on Monday, could fall due to a weakness in base metals. Silver for September delivery on the MCX was trading 0.12 percent lower at 52,778 rupees per kg.
Selling is advised in silver on rallies to 52,800 rupees, for a target of 51,900 rupees, said Thiagarajan.
