Gold prices rebounded on Friday after falling for three past sessions, rising Rs 50 to Rs 70,700 per 10 grams in the local market due to strong trend in the global markets.
The precious metal had closed at Rs 70,650 per 10 grams in the previous session on Thursday.
According to All India Sarafa Association, gold of 99.9 per cent and 99.5 per cent purity edged up Rs 50 each to Rs 70,700 and Rs 70,350 per 10 grams, respectively.
Silver also jumped Rs 400 to Rs 84,400 per kg. It had settled at Rs 84,000 per kg in the previous close.
Traders attributed the rise in gold prices to a pick-up in demand by jewellers in the domestic market and a strong trend in the overseas markets.
On Thursday, the yellow metal rates fell sharply by Rs 1,000 to finish at Rs 70,650 per 10 grams while silver tumbled Rs 3,500 to settle at Rs 84,000 per kg.
The government on Tuesday announced that it has slashed basic customs duties on a range of products, including gold and silver from 15 per cent to 6 per cent.
Following the announcement, gold prices crashed Rs 3,350 to Rs 72,300 per 10 grams and silver declined Rs 3,500 to close at Rs 87,500 per kg in the national capital.
Meanwhile, on the Multi Commodity Exchange (MCX), gold futures jumped Rs 294, or 0.44 per cent, to trade at Rs 67,756 per 10 grams. The most-traded August contract hit an intra-day high of Rs 528 to Rs 67,990 per 10 grams.
Further, silver contracts for September delivery were quoted higher by Rs 59, or 0.07 per cent, to Rs 81,390 per kg on the exchange.
In the overseas markets, comex gold was trading higher at USD 2,416.40 per ounce.
"Gold prices opened higher, with Comex Gold finding support around USD 2,350. Prices have taken a hit recently due to the yen rising with safe-haven buying seen in the currency.
"However, with the Fed policy meeting next week, all eyes are set on any updates regarding a potential interest rate cut in September," Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, said.
However, silver was marginally down at USD 27.89 per ounce in New York.
"Traders are awaiting for the US Personal Consumption Expenditures (PCE) price inflation data to be released later on Friday that is likely to reveal easing pricing pressures, prompt traders to increase their bets on rate cuts, and potentially provide support for gold," Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities, said.
According to Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services, gold is seen consolidating in a range after falling sharply earlier in the week.
Besides, prices are holding above crucial support levels at USD 2,348-2,350 in the international market and facing upside resistance at USD 2,405/2,433 per ounce, he said.
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