In addition, emergence of buying by jewellers at prevailing levels, though selective, supported the upside in the precious metal prices.
Silver also showed some signs of recovery and gathered Rs 230 to settle at Rs 34,330 per kg on scattered demand from consuming industries.
Bullion traders said the recovery was seen in global markets for the first time in 11 days, ending the longest losing streak in almost two decades, as the dollar weakened and investors speculated that recent losses have been overdone.
Moreover, emergence of selective buying by jewellers at existing level too influenced sentiments, they said.
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Gold in London, which normally determines price trend on the domestic front, bounced back from over five-year lows to again regain the USD 1,100 an ounce to USD 1,102.68, rising 0.8 per cent. Silver also moved up by 0.44 per cent to USD 14.86 an ounce.
Meanwhile, gold declined to USD 1,086.18 an ounce on Monday, the lowest since March 2010 amid growing expectations that the US Fed may raise interest rates later this year, eroding appeal of the precious metals.
In the national capital, gold of 99.9 and 99.5 per cent purity, after opening Rs 100 each higher at Rs 25,350 and Rs 25,200 per 10 grams, improved further to close at Rs 25,370 and Rs 25,220 per ten gram respectively.
The precious metal had lost Rs 1,000 in the last 4 days.
Sovereign, however, continued to be traded at the previous level of Rs 22,500 per piece of 8 gram in limited deals.
In line with gold, silver ready opened with strength and finally ended higher by Rs 230 to Rs 34,330 per kg and weekly-based by Rs 250 to Rs 34,100 per kg.