Gold Seen Scaling New High This Week.

MUMBAI: India gold futures are likely to extend gains this week and scale yet another peak on the back of rising crude oil, which enhances the yellow metal's appeal as an inflation hedge. The most-active gold for April delivery on the Multi Commodity Exchange (MCX) was trading 0.60 percent higher at 21,224 rupees per 10 grams at 1:01 p.m., after hitting a record of 21,235 rupees earlier in the session.

"We are bullish on gold on rising crude oil," said Madhu Nagraj, technical analyst with Karvy Comtrade.

Buying could be done at 21,160, targeting 21,350 rupees, said Nagraj.

Troops loyal to Muammar Gaddafi launched counter-offensives against rebel-held towns on Sunday, increasing fears that Libya is heading for a civil war rather than the swift revolutions seen in Tunisia and Egypt, sending U.S. crude to its strongest in more than two years.

Reviving gold demand is also expected to aid sentiment. The high-demand wedding season is underway in India, the world's largest conumer of the yellow metal.

India's gold imports in Oct-Dec. rose 30 percent to 265 tonnes, and an increase in import duty is likely in the upcoming budget, the World Gold Council said on Feb. 17.

Source : economictimes.indiatimes.com