Gold prices drifted by Rs 100 to Rs 28,400 per ten grams at the bullion market today as demand from jewellers and retailers eased at existing levels amidst a weak global trend.
Silver followed suit and recovered Rs 400 to Rs 34,100 per kg.
Gold prices surged by Rs 150 to trade at fresh three-month high of Rs 27,575.
Silver also extended its rally for the eighth day.
Gold slipped to near 5-1/2-year lows on Friday and was on course for a sixth straight weekly fall.
Spot gold was up 0.6 percent at $1,103.60 an ounce by 0318 GMT, after an early low of $1,096.65.
Dealers anticipated a sharp rise in jewellery demand this wedding season, but then came demonetisation.
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Silver declined by Rs 200 to Rs 38,550 per kg.
Globally, gold declined from the highest level.
The decline is mainly due to the record high prices that dampened consumer demand, Bombay Bullion Association director Suresh Hundia said, adding volume of shipment also declined in October as the festival demand is no longer there.
A strengthening rupee following a sharp surge in the inflow of foreign money from investors and "illegal imports" were among some of the reasons for the fall.
Silver also recorded a steep fall of Rs 1,550 to Rs 34,450 per kg.
Silver also remained under selling pressure.
The all-time high price of silver is Rs 75,000 a kg, recorded in April 2011.
Silver also rebounded by Rs 450 to Rs 38,100 per kg
The demand for the precious metal declined as the prices hovered between Rs 14,500 to Rs 15,000 per 10 grams level in the domestic markets, Bombay Bullion Association president Suresh Hundia told PTI from Mumbai. Multi Commodity Exchange October gold was ruling at Rs 14,865 per 10 grams on Monday, while in global markets it was at $935.8 an ounce (28.34 grams).
Gold surged by Rs 325 to trade at over three-month high of Rs 27,890 per 10 grams at the bullion market on Thursday.
Gold regained its sheen on Wednesday by soaring Rs 315 to Rs 27,565 per 10 grams at the bullion market.
Gold slips by Rs 150 on low demand.
Concern would kick in if imports stay at or over 100 tonnes a month.
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Bullion merchants said apart from sustained buying by jewellers and retailers to meet rising wedding season demand, a firming global trend mainly boosted the sentiment.
Gold in New York, which mostly set the price trend on the domestic front, jumped up by $33.50, or 2.73 per cent to $1,262.60 an ounce and silver by 0.68 per cent to $16.96 an ounce in Thursday's trade.
Gold continued its upward trend for the sixth straight day and gained another Rs 190 to Rs 26,190 per ten gram at the bullion market on Thursday.
Gold import stood at 18 tonnes in May, according to the data provided by the Bombay Bullion Association. Gold prices ruled over Rs 14,600 per 10 grams level in both spot and futures markets last week. In the international markets gold prices were at 938.55 an ounce (28.34 grams).
Bullion merchants said persistent rise in gold prices is mostly due to a firming trend in global markets as concerns over European economy mounted, spurring demand for safe-haven, and increased buying by jewellers to meet wedding season demand at domestic spot markets.
Silver also spurted by Rs 1,000 to Rs 37,500 per kg.
Silver also recovered by Rs 515 to Rs 36,750 per kg on increased offtake by industrial units and coin makers.
The precious metal has lost Rs 100 in the past two days.
Gold prices will rise next year as the financial crisis pushes more investors into the precious metal safe haven, according to delegates polled on Tuesday during the London Bullion Market Association annual meeting in Kyoto.
Silver also reclaimed the Rs 34,000 per kg mark.
There was positive news from across the country especially from the South.
Orders for the festive season abroad begin from next month.
Diversion of funds towards the surging equity weighed on the precious metal's price
Silver recovered by Rs 100 to Rs 36,950 per kg.
Silver also fell for the third day.
Bullion traders said besides ongoing wedding season demand, a firm global trend as the weakening in dollar revived the appeal of the metal as an alternative investment, mainly boosted the sentiment.
Silver, however, remained weak and fell by Rs 130 to Rs 39,600 per kg due to slackened demand from industrial units.
The second day of pre-Diwali Dhanteras witnessed a tepid response from shoppers on Friday as gold and silver sales have likely to be fallen by up to 35 per cent year-on-year due to high prices and COVID-19 induced financial distress, although consumers moved to online buying to make most of the festival, jewellers said. The buying was heavily restricted to light weight jewellery, coins and precious stones due to lower purchasing power and high gold rates, they said. Due to the fear of coronavirus infection, many customers who had booked in advance were taking delivery of wedding orders on Friday, while some were seen buying safely through online brands like Tanishq and Melorra.
Traders said lack of buying support from retailers and jewellers who preferred to keep their activity restricted, anticipating further fall in coming days, mainly kept gold prices unchanged.
The scheme, touted as a panacea to burgeoning CAD, was a huge flop that fostered a spike in smuggling and allowed several Gitanjali-like players to make a killing
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