Silver also rebounded by Rs 400 to Rs 37,250 per kg on increased offtake by industrial units and coin makers.
Bullion merchants said increased buying by jewellers and retailers to meet wedding season demand and a firming trend overseas where gold surged to one-month high, mainly boosted the sentiment.
Globally, gold rose by 0.7 percent to USD 1,231.29 an ounce in Singapore, the highest price since December 11, on speculation that the US Fed will go slow in raising interest rates, weakening the dollar and boosting demand for the precious metal. Silver also rose 0.7 per cent to USD 16.61 an ounce.
In the national capital, gold of 99.9 and 99.5 percent purity flared up by Rs 230 each to Rs 27,480 and Rs 27,280 per ten grams respectively.
Sovereign, however, remained flat at Rs 23,800 per piece of eight grams in limited deals. In line with a general firm trend, silver ready recovered by Rs 400 to Rs 37,250 per kg and weekly-based delivery by Rs 415 to Rs 37,245 per kg.
On the other hand, silver coins continued to be traded at last level of Rs 61,000 for buying and Rs 62,000 for selling of 100 pieces.