Dhanteras' buying seemed to have been sparked by the belief that prices would remain firm
Traders said rebound in gold prices was mostly in tandem with a firming global trend on speculation that prices near a two-month low will spur purchases.
Silver also declined by Rs 180 to Rs 39,175 per kg.
Globally, gold rose 0.16 per cent to $1,279.70 an ounce in London.
Falling for the sixth straight day, gold prices drifted by another Rs 70 to trade at fresh two-month low of Rs 26,680 per ten grams at the bullion market on Friday, tracking a weak global trend amid slackened demand from jewellers and retailers.
The gold prices on Tuesday dipped as low as Rs 11,000 per 10 gram, down nearly one-fifth from this year's high of Rs 13,650 scaled nearly a month-ago on July 15. The price has come close to its level seen during the Diwali season last year, when it stood at near Rs 10,500 per 10 gram. This year, Diwali falls on October 28.
However, silver held steady at Rs 42,600 per kg on scattered enquiries from industrial units.
After losing Rs 270 in the last two sessions, the gold prices fell further by Rs 100 to Rs 28,440 per 10 gm on stockists selling.
According to jewellers and MMTC-PAMP India, gold demand has picked up in the wake of good monsoon and favourable price levels. There was positive response and more footfalls.
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Gold companies have started reducing production. This implies that gold prices will not go on a free fall anytime soon
Traders said slackened demand from jewellers and retailers and absence of cues from the global markets as US market are closed today on account of 'Labor Day', kept pressure on gold prices.
Gold prices rose for the third straight day.
If there is turmoil in currencies, gold can shoot up sharply, says author of Arora Report.
Traders said sentiment turned distinctly weak after gold prices slumped in global markets as Swiss voters rejected a plan for their central bank to accumulate bullion and oil extended its decline to five-year low, curbing demand for the precious metal.
Global gold prices held below $1,200 an ounce this week.
Silver also dropped Rs 560 to Rs 36,440 per kg.
Silver settled at Rs 37,280 per kg after firming up by Rs 230.
Silver, however, held steady at Rs 37,100 per kg
The government has hiked gold import duty to 15 per cent from 10.75 per cent to check the current account deficit (CAD) and rising import of the yellow metal. The duty changes came into effect on June 30. Earlier, the basic customs duty on gold was 7.5 per cent, now it will be 12.5 per cent.
For the first time, consumers, including those at the so-called bottom of the pyramid, are monetising gold by taking loans from banks, offering the yellow metal as collateral, says Tamal Bandyopadhyay.
Traders attributed the recovery in gold prices to a better trend in global markets.
You can use gold as a financial instrument to diversify your portfolio into hedging against uncertainties in the market, but for ambitious returns, you must explore opportunities in other asset classes such as equities, debts and real estate, says Adhil Shetty, CEO, BankBazaar.com.
Bullion merchants said besides increased buying by jewellers and retailers to meet festive season demand, costlier imports due to weakening of the rupee, led to the rise in gold prices.
Gold falls on muted demand, silver shapes up on fresh buying.
Silver, however, remained steady at Rs 37,200 per kg.
Gold prices resumed the day on a historic high at the bullion market in Mumbai on Thursday, with standard gold (99.5 purity) opening at Rs 6675 per ounce, a level not seen before.
Scattered low level buying by retailers helped gold prices to trade marginally higher.
The global official gold holdings totaled 31,694.8 tonnes as of April 2013.
In dollar terms, however, gold prices jumped by 26 per cent this calendar year, following sharp jump in hedge funds' long position
Silver also recovered by Rs 250 to Rs 37,300 per kg.
Globally, gold traded a shade higher at $1,210.15 an ounce.
Silver also dropped by Rs 1,490 to trade below Rs 40,000 at Rs 39,010 per kg on poor offtake by jewellers and coins makers.
Gold prices have hit a record high of Rs 26,000 per 10 grams for the first time ever.
Regaining the lost sheen, sales of gold jewellery and coins are set to touch pre-COVID levels in volume terms on the auspicious Dhanteras as easing pandemic concerns and pent up demand saw consumers flocking to stores to buy the precious metal. Increased footfall at stores and brisk sales online as well as relatively softer gold prices compared to record Rs 57,000 per 10 grams level in August spurred increased buying, especially light weight offerings, on Tuesday. Dhanteras is considered to be auspicious for buying precious metals and other valuable items.
Silver rose by Rs 50 to Rs 36,050.
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.
Muthoot offers 13-13.4 per cent annual interest on the NCDs, close to one per cent higher than previous public offer.
Silver met with resistance and fell by Rs 200 to Rs 36,000 per kg.
Traders said slackened demand from jewellers and appreciating rupee, which made import of precious metal cheaper, weighed on gold prices but a better trend in the global markets restricted the losses.
