Gold futures closed higher in the domestic market on Tuesday as investors and speculators booked fresh positions in the yellow metal as a weaker dollar bolstered the lure for the bullion as an alternative asset. Weaker dollar makes the precious metal cheaper for those holding other currencies, thus boosting gold demand.
Further, soft US economic data raised speculation that the US Federal Reserve may hold off further tightening of interest rates in the near-term, bolstering the lure for gold as a store of value.
At the MCX, Gold futures for August 2016 contract closed at Rs 31,795, per 10 gram, up by 0.83 per cent after opening at Rs 31,496, against the previous closing price of Rs 31,534. It touched the intra-day high of Rs 31,839.