India gold futures extended gains for a second day on Wednesday tracking overseas markets, where a weak dollar supported the yellow metal, analysts said.

The most active August gold contract on the Multi Commodity Exchange (MCX) was 0.15 per cent higher at Rs 14,880 per 10 grams at 11:40 a.m., after gaining 0.3 per cent in the last session.

"Mostly gold is getting support from a weak dollar overseas," said Debjyoti Chatterjee, associate vice-president with ADMISI Commodities in Mumbai.

The dollar hit the year's lows against the Australian dollar and sterling after upbeat US housing data the previous day buoyed risk appetite and reduced safe-haven demand for the greenback.

"It would continue to be in rallying mode until it breaches 15,200 rupees," added Chatterjee.

Traders would look at US April factory orders and ISM May non-manufacturing data for direction in the precious metals complex.

Gold may trade in the range of Rs 14,800-15,000 on Wednesday, said Abhishek Chauhan, a technical analyst with Angel Commodities.

Domestic gold's upside was capped due to a strong rupee, that makes the dollar-denominated asset cheaper.

The Indian rupee strengthened to its highest in seven months as the US unit continued its downward journey against major currencies.

Open interest for August gold on MCX was at 14,777 lots, up from 14,588 a day earlier. Volume on Tuesday was 41.69 kg.