Amidst rout in global equities on Tuesday gold soared to over 14-month high of Rs 31,600 per ten gram - gaining Rs 330 at the bullion market here, largely in sync with the overseas trend.
The gains were also supported by strong demand from local jewellers to meet the wedding season demand.
Silver gained as well and reclaimed the Rs 40,000-per kg mark on the back of increased offtake by industrial units.
Traders said a massive sell-off in stock markets globally led investors to seek shelter in safe haven investments, particularly precious metals.
The BSE Sensex cracked below the 34,000-mark by plunging about 1,275 points or 3.6 per cent in opening trade due to across-the-board losses after investor sentiment was hit by a sell-off in world markets.
The US Dow suffered its deepest fall in history, erasing all of its 2018 gains, while the S&P 500 took a beating to sit down for the year yesterday. Most of the Asian markets followed the suit.
As safe haven investment, bullion markets became attractive. In Singapore, gold edged up by 0.27 per cent to USD 1,342.60 an ounce and silver up 0.84 per cent to USD 16.85 an ounce.
Besides, traders said, wedding season buying by local jewellers supported the upside.
In the national capital, gold of 99.9 and 99.5 per cent purity rallied by Rs 330 each to Rs 31,600 and Rs 31,450 per 10 gram, a level last seen on November 9, 2016. Sovereign, however, held flat at Rs 24,800 per piece of eight grams.
In a similar fashion, silver ready surged by Rs 500 to Rs 40,000 per kg and weekly-based delivery by Rs 510 to Rs 38,960 per kg. Silver coins continued to be traded at previous level of Rs 74,000 for buying and Rs 75,000 for selling of 100 pieces.