In New Delhi, the price of 22-carat gold rose to Rs 51,250 per 10 gram. Gold in 24 carat in the national capital was retailing at Rs 52,450. In Chennai 22-carat climbed steadily to Rs 50,370 while the price of 24-carat gold price in Chennai was at Rs 54,940. In Mumbai, the rate was Rs 50,760 for 22 carat gold, according to the Good Returns website.
On MCX, August gold futures climbed over 1% to Rs 52,649 per 10 gram while silver September futures slipped 0.41% to Rs 65,260 per kg.
MCX has decided to accept gold and silver bars refined at domestic refineries for deliveries, subject to final regulatory approval. MCX received the approval of Sebi for the launch of Gold Mini options with Gold Mini (100 grams) bar as underlying, MCX said in a statement.
In the international market, gold gained on Tuesday ahead of a US Federal Reserve
policy meeting which is expected to provide more monetary stimulus to support the coronavirus-hit economy, though bullion pulled back from an all-time high reached earlier.
As of 11:10 a.m EDT (1510 GMT), spot gold was up by 0.3% at $1,947.51 per ounce, while U.S. gold futures rose 0.93 % to $1,949.00 per ounce.
Gold surged to a record high of $1,980.57 an ounce earlier in the session, but prices have retreated as much as 3.7% since then as investors booked profits and the dollar bounced back.
"When you get a strong momentum coming in, you get a lot of speculators who are looking to turn a quick profit," said Michael Matousek, head trader at U.S. Global Investors.
"Nothing has changed fundamentally at all, the deficits and lower interest rates stoking inflation are still going to be here, so there is no reason not to own gold really."
Investors now eye the two-day Fed meeting beginning Tuesday, where it is widely expected to reiterate its accommodative policy stance.
The Fed announced extension of several of its lending facilities through the year-end.
Rising Covid-19 infections, simmering China-US tensions, massive stimulus and a low interest rate environment to aid pandemic-hit economies has helped gold rally 28% so far this year.
Gold prices are expected to rise to $2,300 per troy ounce over the next 12-month horizon, Goldman Sachs said, as concerns around the longevity of the US dollar as a reserve currency have started to emerge.
"We have long maintained gold is the currency of last resort, particularly in an environment like the current one where governments are debasing their fiat currencies and pushing real interest rates to all-time lows," Goldman said.