Gold hits two-month high on global cue

Spot gold hit a two-month high on Tuesday on Mumbai's Zaveri Bazaar following a similar move on the global markets as investors bet the new head of the US Federal Reserve, Janet Yellen, would renew the bank's pledge to keep policy ultra-easy at her first testimony to Congress.

Gold gained two per cent in two days to settle on Tuesday at Rs 30,440 per 10g, the level it had not seen after December 14. Silver gained one per cent to Rs 45,700 a kg in spot trade.

"So far, positive US payroll data have been a supportive factor for bullion to move upwards. But, the rise can be attributed to an upbeat global move. We believe gold price will hit $1,320-25 in the near future, provided no bad news comes from Yellen," said Gnanasekar Thiagarajan, director, Commtrendz Research.

In London, the gold price jumped 1.5 per cent to $1286 an oz. Silver gained 0.8 per cent in spot London trade.

"Generally, silver follows gold, but with a lag. Hence, silver prices are also likely to move upwards," said Thiagarajan.