Gold rose on Tuesday due to rising physical demand from India but growing expectations of a US interest rate hike kept a lid on prices. The metal is highly sensitive to rising US rates, which lift the opportunity cost of holding non-yielding assets while boosting the dollar. Spot gold was up 0.4% at $1,268.68 an ounce at 12.20pm GMT. It has traded in a narrow $6.60 per ounce range for the past five sessions. Analysts say demand from India is expected to remain elevated as festivals, including Dhanteras and Diwali, will be celebrated at the end of the month — two of the most important Hindu festivals and a time when gold is traditionally given as a gift. "Gold has been clearly supported by physical buying in the Indian market especially and gold prices are at a slight premium there," said Société Générale’s head of metals research, Robin Bhar. He said higher premiums were an indication of physical buying. US gold futures were up 0.4% at $1,267 an ounce. At the same time, markets seem...
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