Gold rallies as risk aversion builds

MUMBAI: Safe haven buying lifted gold above $1,200 an ounce on Tuesday, a level it has largely been stuck at in the past two months. Falling global stocks and oil prices, commodity analysts like Gnanasekar Thiagarajan believe, are the catalysts for a gold rally. However, a stronger dollar could offset an effective rally in the metal. A stronger dollar translates into higher rupee price of gold, one of the country’s largest import products.

On Tuesday intraday, gold for February delivery on commex MCX traded up almost 1% at Rs 27,296 per 10 grams. OI of the contract rose to an intraday 7,665 units from 6,803 units on Friday, implying that traders were taking long positions.