Extending its gain for the second day on Thursday, gold surged by a further Rs 230 to close at Rs 11,850 per 10 gm on the bullion market on heavy buying sparked by firm global trends.
The precious metal has recovered Rs 460 in the last two trading sessions, after falling by over 500 points on Tuesday.
Marketmen said gold gained as it rose in global markets on firming crude oil. A rise in demand due to current festival season also supported it.
In London, gold gained 8.88 dollars to $835.67 an ounce for the second straight day, after touching an eight-month low of $802.37 on August 11. Silver added 17.5 cents at $15.085 an ounce.