Domestic gold futures edged higher on Tuesday as the global benchmark rate held steady near a one-week high amid safe-haven demand on rising cases of the Delta variant of the coronavirus. However, a firmer dollar -- which makes the precious metals more expensive for holders of other currencies -- kept the upside in check.

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On MCX, gold futures (October 5) traded marginally higher at Rs 47,237 in early deals. Silver futures (September 3) gained by as much as Rs 198 to Rs 63,655.

Globally, spot gold was last seen trading almost flat at $1,787.90 per ounce, having touched its highest level recorded since August 6 the previous day. US gold futures eased 0.1 percent to $1,788.40 per ounce.

"We expect both the precious metals to remain volatile but continue to hold their support levels, and any decline would be an opportunity for buying at lower levels," said said Manoj Kumar Jain, Director-Head of Commodity Research, Prithvi Finmart.

Gold has support at $1,774-1,762 per troy ounce and resistance at $1,800-1,814 per ounce, he said. On MCX, he pegged support for the yellow metal at Rs 47,000-46,800, and resistance at Rs 47,330-47,580.

The dollar index -- which gauges the greenback against six rivals -- rose as much as 0.11 percent.

Analysts say market participants are weighing the vaccine drives against the number of Covid-19 cases. All eyes are now on the minutes of the Federal Reserve’s last scheduled review due for release on Wednesday for cues.

Meanwhile, the financial markets also monitored turmoil in Afghanistan after the Taliban seized the capital. (Catch latest updates on Afghanistan here

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On Monday, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.1 percent to 1,020.63 tonnes.

How to trade in gold now

Jain suggests buying gold on dips around Rs 47,050 for a target price of Rs 47,500 with a stop loss at Rs 46,800. For silver, he recommends going long around Rs 63,000 for a target of Rs 64,400 with a stop loss at Rs 62,400.