Silver regained the Rs 35,000 per kg mark by gaining Rs 660 on increased offtake by industrial units and coin makers.
In addition, depreciating rupee against the dollar making imports costlier, supported the upside in gold prices.
At the forex market, the rupee was trading lower by 39 paise at 64.26 against the dollar (intra-day).
Bullion traders said a firming global trend where gold again topped the USD 1,100 an ounce mark, as investors may have factored in the likely impact from the first US rate increase since 2006, which may come next month, and on speculation that physical demand in Asia may be picking up, gold prices rallied at the domestic market.
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Besides, increased buying activity by jewellers and retailers to meet seasonal demand, too influenced sentiments, they said.
In the national capital, gold of 99.9 and 99.5 per cent purity spurted by Rs 200 to Rs 25,400 and Rs 25,250 per ten grams respectively, a level last seen on July 25.
The precious metals had gained Rs 220 in the previous three sessions.
Sovereign, however, held steady at Rs 22,200 per piece of eight gram in limited deals.
Silver coins climbed Rs 1,000 to Rs 49,000 for buying and Rs 50,000 for selling of 100 pieces.