For all the worries among investors and policymakers over the rupee's sudden plunge to record lows, the Indian economy is in better shape to handle a depreciation than it was when the currency last hit the buffers a year ago.
Traders said low-level buying by stockists and shifting of funds from weakening equity to rising bullion mainly boosted the sentiment.
Movements in gold prices will depend on the US' interest rates.
A sharp fall in Sensex and rupee against dollar and strong global cues also contributed to the upsurge in gold price, which posted the biggest single-day gain after August 19, 2011. Interestingly, the metal had shot up by Rs 1,310 on August 19, 2011 as well.
Gold prices fell by Rs 180 to Rs 27,520 per 10 grams on Monday, while silver prices also dropped by Rs 300 to Rs 45,500 per kg taking weak global price trend.
The rupee was trading lower at Rs 61.38 after dipping to 61.74 (intra-day).
The US Federal Reserve's decision to continue bond-buying has lifted investor sentiment for gold and silver.
Ten years ago, gold was selling at well below its long-term inflation-adjusted average, and the integration of three billion emerging market citizens into the global economy could only mean a giant long-term boost to demand.
However, other commodities yet to see meaningful recovery in global markets
The rise was due to a sharp fall in prices, which spurred demand.
Jim Rogers, chairman of Rogers Holdings, tells Puneet Wadhwa that the US bond market that hit bottom in 1981 and has been in a bull-run since then, is coming to an end.
The precious metal has now lost Rs 280 in last three days.
The government on Friday slashed the import tariff value on gold and silver to $405 per ten gram and $642 per kg, respectively, in line with global trends.
Shanghai Gold Exchange plans to open a centre at GIFT City, in partnership with BSE or NSE
Gold rallied to scale two-month peak at the domestic bullion market on Thursday on frantic buying in the backdrop of the government's decision to raise import duty on the metal.
Gold prices firmed up after Tuesday's decline, mainly because of fresh buying by local jewellers at the domestic spot market, coupled with a better trend globally.
Gold loans are a quick, easy and low-cost way to meet your immediate and emergency financing needs, but do ensure that you entrust your gold in safe hands after thorough due diligence, suggests Gaurav Gupta, founder and CEO, MyLoanCare.in.
Traders said sustained buying by stockists to meet the festive and marriage season demand mainly helped gold prices to extend gains for the second session.
A dedicated physical gold exchange could lead to standard gold pricing in India.
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.
The direction of gold prices will depend on central banks, bullion banks and leveraged hedge funds.
After completing four days of gains, gold prices spurted here by Rs 400 today to regain the psychological level of Rs 28,000 per ten grams on sustained seasonal buying amid a firming global trend.
Shares were also buoyed by positive global sentiment on hopes major central banks will ease monetary policy further or continue to keep it loose for long.
Silver also dropped by Rs 800 to Rs 40,600 per kg on reduced offtake by industrial units and coin makers.
Nearly two-thirds of India's gold demand comes from rural areas where jewellery is a traditional store of wealth for millions who have no access to the formal banking system.
India is aiming for a material acceleration in growth, with targets of 6.1-6.7 per cent in the current fiscal 2013-14, over 7 per cent in FY 2015.
Traders said persistent selling by stockists in line with a weakening global trend after Federal Reserve Chairman Ben Bernanke signalled that the central bank may start curbing stimulus programme this year, mainly dragged gold and silver prices down.
Gold prices are likely to rise by up to Rs 700 per 10 gram in the short term with tapered demand following the government decision to hike import duty on the precious metal, according to jewellers and analysts.
Tanishq has been pretty much careful to not bet on gold prices.
The government on Monday reduced the import tariff value of gold to $458 per 10 grams due to fall in its global prices.
Gold prices on Friday rose by Rs 210 to hit another five-week high of Rs 28,300 per 10 grams in the national capital on sustained buying by stockists amid a firming global trend.
Govt cannot assume it will solve current account problem.
A downturn in Indian demand could hit global gold prices.
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The current upsurge in gold prices placed the metal to a level last seen on April 10.
Inflation in food articles, fuel and power contracted in July.
Buying was restricted at higher levels.
Gems & jewellery exports seen rising, too, as demand remains strong in all markets except Europe.
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