The Reserve Bank of India (RBI) has asked banks to reduce their exposure to non-banking financial companies (NBFCs), which have given loans mostly against gold, sending shares of such companies sharply lower.
The Reserve Bank of India (RBI) has asked banks to reduce their exposure to non-banking financial companies (NBFCs), which have given loans mostly against gold, sending shares of such companies sharply lower. Reuters

Gold prices rose slightly Tuesday on higher crude oil prices and a declining dollar.

Gold futures traded on the New York Mercantile Exchange rose 0.13 percent to trade at $1,651.80 per ounce at 1:37 pm. Silver futures were up 0.96 percent.

The U.S. Dollar Index, an indicator of risk-appetite and usually inversely correlated with gold, was down 0.08 percent. When the dollar declines in value it makes gold less expensive for those buying the metal with non-U.S. currencies.

Early in the day's trading session, gold rose as Spain successfully sold more than €3.2 billion ($4.2 billion) in short-term debt. Moreover, a key German economic confidence indicator came in better than expected.

However, the yields Spain paid on the short-term debt instruments from the auction were higher than those of previous comparable auctions, a reminder that the market is still worried about the euro zone debt crisis.

A stark assessment of the euro zone from the International Monetary Fund -- which warned about the risk of a prolonged period of deflation unless policymakers enact non-standard measures to support the region's banking system - also dampened sentiment, according to the Wall Street Journal.

Yields on Spain's 10-year bonds, a closely watched barometer of the euro zone debt crisis, breached 6 percent on Monday, although they have fallen to 5.9 percent on Tuesday.

Meanwhile, crude oil rose 1.5 percent in New York trading to $104.43 per barrel.

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Gold Gold prices Crude oil New York