LONDON: 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 per cent at $1,268.68 an ounce at 1220 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.

US gold futures were up 0.4pc at $1,267 an ounce.

Silver was up 0.6pc at $17.67 an ounce. It touched a more than two-week high of $17.88 in the previous session. Platinum was up about 2pc at $959.40 an ounce after hitting a two-week high of $963.60, while palladium was up 0.9pc at $636.47.

Published in Dawn October 26th, 2016