Precious metals futures ended slightly higher on Tuesday, as a greater-than-expected increase in U. S. producer prices and retail sales in June boosted bullion's appeal as an inflation hedge. „h Gold futures on MCX rose by 0.41 percent, compared with the rise of 1.1 percent on COMEX. Silver futures also rose, gaining 0.63 and 0.82 percent on MCX and COMEX respectively.

Buying of physical gold remained lackluster as India imported 11.6 tonnes of gold in June, down 52 percent from 24 tonnes a year ago - the head of Bombay Bullion Association.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings fell to 1,094.54 tonnes as of July 14, down 15.27 tonnes, or 1.4 percent, from the previous business day.

Workers in South Africa's gold sector rejected the latest offer for a pay raise of between 8 percent and 10 percent and vowed to soon escalate the dispute - the National Union of Mineworkers.

The consensus-beating rise in the U. S. PPI, twice as big as expected, is reigniting fears over rising inflation, against which gold is often bought as a hedge. June's producer prices rose 1.8 percent.

Rising commodity prices are sparking inflationary concerns in the U. S. Higher than expected PPI numbers from the U. S. lent support to gold in the last trading session. An upward momentum in industrial metals may drive investors’ interest in silver as it looks very attractive at these levels. We believe silver prices can edge higher during the day.