International gold inches up; weak dollar supports

Overseas gold inched up on weak dollar and increased physical buying from China supported the sentiment. International spot gold was seen trading at $1,668 an ounce.

The euro rose 0.4% after the European Central Bank kept interest rates unchanged. Precious-metals shine more during the times of uncertainties but one should also keep in mind their inverse relationship with US Dollar.

Gold and dollar share an inverse relationship with each other and the weakness in dollar aided precious metal.

Gold futures reversed morning losses and was seen trading flat. Gold for February contract 2012, on the Multi Commodity Exchange was trading at Rs 30,786 per 10 grams, at 1.15 pm IST.

Silver futures for March delivery on MCX was trading higher by Rs 240 at Rs 58,439 per kgs.

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