The market, which regained strength on the last day of previous week's, advanced on sustained buying by stockists in line with overseas trading where spurted as hedge funds and other large speculators seek to diversify their holdings.
Gold for immediate delivery in Asian markets rose $3.05, or 0.6 percent, to $506.30 an ounce.
The metal dipped below 500 to reach $493.30 on December 16 after Japanese traders sold the metal following Tocom's decision to raise the cost of trading bullion to curb speculative buying.
The yellow metal was equally better in domestic markets. Standard gold and ornaments rose further by Rs 30 each at Rs 7,510 and Rs 7,360 per ten gram while sovereign was unchanged at Rs.5950 per piece of eight gram.
Silver was also higher by Rs 150 at Rs 12,650 per kilo while weekly-based delivery rose by Rs 70 at Rs 12,720 per kilo.
Silver coins were unchanged at Rs 16,900 for buying and Rs 1,700 for selling of 100 pieces.