MUMBAI: India gold futures may tread higher this week to test record highs on the back of rising crude oil and expectations of a weak dollar overseas, analysts said.
Investors would also closely watch the US and eurozone inflation data due later in the week to see whether government stimulus is feeding higher prices, which may lead to early monetary tightening.
The most-traded gold December contract was 0.39 per cent higher at Rs 15,899 per 10 grams at 4:49 pm, after hitting a high of Rs 15,936.
The contract had rallied to a seven-month high of Rs 16,009 in September 16, near the record high of Rs 16,040 struck on February 20.
"The outlook would be positive on dollar and strong crude," said Gnanasekar Thiagarajan, director, Commtrendz Research in Mumbai.
"It could cross Rs 16,000 very easily," said Thiagarajan, adding resistance is placed at Rs 16,045/Rs 16,250.
Despite dollar's gains against the yen, its sentiment remained bearish, and relinquished early gains against the euro, after a 1 per cent rise in European shares prompted some demand for riskier assets.
A weak dollar spurs investment in alternative assets like the yellow metal.
ICE Brent crude futures jumped above $71 a barrel, buoyed by indications of stronger demand and a breach of technical resistance levels.
Rising crude oil also enhances gold's appeal as an oil-led inflaton hedge.
"Gold might test a fresh high of Rs 16,100 as buying momentum would continue," said Debjyoti Chatterjee, an analyst with ADMISI Commodities.
