Silver remained under selling pressure and lost Rs 200.
Globally, gold gained 0.4 per cent to $1,098.62 an ounce and silver gained 0.9 per cent to $14.95 an ounce in Singapore.
Bullion traders said sustained buying by jewellery fabricators and retailers to meet the festive season demand mainly kept precious metal prices higher.
Gold declined by Rs 190 to Rs 31,950 per 10 grams in the bullion market in New Delhi on Monday, while silver lost Rs 800 to Rs 60,400 per kg on subdued demand at higher levels.
Snapping its four-day losing streak, gold rebounded by Rs 100 to Rs 27,070 per ten grams at the bullion market on Wednesday.
Spot gold was up 0.6 percent at $1,103.60 an ounce by 0318 GMT, after an early low of $1,096.65.
Silver also dropped by Rs 300 to Rs 38,400 per kg.
Thomson Reuters Proprietary Research study pointed to a strong momentum for gold over the medium term, identifying strong global liquidity and low interest rates as support for a continued rally.
In line with overall trends, silver ready recovered by Rs 150 to Rs 36,800 per kg and weekly-based delivery by Rs 175 to Rs 36,800 per kg.
Gold prices staged a smart rebound to surpass the psychologically important Rs 28,000 milestone.
Silver followed suit, which traded lower by Rs 260 to Rs 38,540 per kg.
Gold for August delivery jumped $8.70 to settle at $1,292.90 an ounce on the Comex division of the NYMEX late on Friday.
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.
The upsurge was further supported by a firming global trend.
Gold in London, which normally sets price trend on the domestic front, fell by 0.1 per cent to $1,314.99 an ounce and silver by 0.3 per cent to $20.91 an ounce.
Traders attributed the recovery in gold prices to fresh buying by jewellers to meet festive season demand and a firming global trend as investors weighed tension over Ukraine.
Silver, however, found some buying support.
Traders said sentiment in gold remained bearish as the metal extended a decline from the highest level in more than three months in global markets amid expectations that Federal Reserve minutes will show policy makers backing further stimulus cuts.
Gold prices plunged by Rs 220 to Rs 27,350 per ten grams at the bullion market in New Delhi on Thursday, snapping a four-day rising streak, owing to slackened demand at prevailing higher levels amid a weak global trend.
Selling gathered momentum as gold dropped in global markets before a report that may show US employers added more jobs last month, reducing the appeal of bullion as a haven, traders said.
Gold in New York, which normally sets price trend on the domestic front, traded marginally up 0.07 per cent to $1,291.80 an ounce.
Gold edged higher by 0.19 per cent to $1,225.80 an ounce
The precious metal had gained Rs 435 in the previous three sessions.
A drop in demand from local jewellers and retailers at current levels weighed on the prices
Traders said increased selling by stockists, tracking a weak trend overseas as investors awaited US employment data that may show the economy is strengthening, mainly dampened the sentiment.
Silver also traded higher by Rs 250 to Rs 41,000 per kg on increased offtake by industrial units.
Gold is the first product for options trading that markets regulator Sebi has allowed after 14 years of commodity exchanges in the country.
Silver also dropped by Rs 400 to Rs 35,650 per kg.
Gold in London, which normally sets price trend on the domestic front, fell 0.6 per cent to $1,311.65 an ounce.
Globally, gold prices slipped by 0.26 per cent to $1,246.20 an ounce in early trade in London.
Traders said increased buying by stockists and retailers mainly kept gold prices remain higher for the third day.
However, silver rose for the third straight session by adding Rs 375 to Rs 48,800 per kg on increased offtake by industrial units and coin makers.
Traders said apart from fall in demand from jewellers and retailers at prevailing levels, a weak global trend as the strengthening dollar eroded appeal for the precious metal, mainly influenced sentiments in New Delhi.
Gold demand in Mumbai has declined by 50 per cent during the last three days to approximately 500 kg compared with one tonne during the normal season.
Gold falls on muted demand, silver shapes up on fresh buying.
Traders said the fall in gold prices was mostly in line with a weak trend in the global markets as signs of easing tensions in Ukraine curbed demand for the precious metal as a haven.
Surging capital markets in India are turning investors away from the bullion market to attractive stocks. This has resulted in the fall of gold prices on lack of buying supporters.
Silver also turned weak and prices eased by Rs 100 to Rs 36,900.
Traders said emergence of buying at prevailing lower levels by jewellers and retailers mainly supported the upside in prices of precious metals.
Gold prices fell by Rs 80 at Rs 27,150 per 10 grams at the bullion market on Wednesday.
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