World shares staged a cautious rally, while the safe-haven Japanese yen fell to a one-week low against the US dollar.
"The ultimate threat of a full escalation into a trade war, with bans and boycotts, is off the radar screen at least for the moment," Julius Baer analyst Carsten Menke said
The precious metal had closed at Rs 38,770 per 10 gram on Saturday
Gold demand was lacklustre in India as well, with dealers offering a discount of up to $3 an ounce over official domestic prices this week, compared to a premium of $1.5 an ounce last week
Globally, gold prices traded firm on Thursday amid the US-China political spat and trade uncertainities
Gold gains amid concerns over US-China trade deal, Hong Kong tensions
The prices were ruling at around Rs 39,000 per 10 gram on this Dhanteras, as against Rs 32,690 per 10 gram on the same day in 2018.
In the international market, gold was trading at $ 1,466 an ounce and Silver at $ 16.86 per ounce in New York
The dollar was stable after a rise in US consumer prices was greater than expected
The rupee depreciated 30 paise to 71.77 against the dollar in early trade on Wednesday amid rising concerns over the US-China trade deal and political unrest in Hong Kong
The lack of a coherent policy and the unwillingness of Indian jewellers to reform are tarnishing the industry
Gold slumped 3.6% last week for its biggest weekly decline in three years on upbeat equities and optimism surrounding the U.S.-China trade deal.
HDFC Securities Senior Analyst (Commodities) Tapan Patel said spot gold prices for 24 Karat in Delhi were trading up by Rs 118 with recovery in global gold prices and sharp rupee depreciation.
In tandem with a weak trend in gold, silver prices also tumbled Rs 956 to Rs 45,498 per kg from Rs 46,454 per kg in the previous trade
Tracking the rise in gold, silver prices also moved up by Rs 230 to Rs 46,510 per kg from Rs 46,280 per kg on Wednesday.
Traders said a weak trend overseas as rising dollar eroded appeal of the precious metals as safe haven investment influenced prices at domestic markets
Gold goes up Rs 80 to Rs 30,780 per ten gram at the bullion market on Tuesday, Silver also recaptured the Rs 41,000-mark by surging Rs 520 to Rs 41,270 per kg
Globally, gold rose 0.41% to $1,296.10 an ounce and silver by 0.44 per cent to $17.13 in Singapore
US interest rate hikes will keep prices subdued in first half; geopolitical problems to ensure fall won't be steep
Silver prices also witnessed correction, falling Rs 1,190 to Rs 47,090 per kg, from Rs 48,280 per kg on Friday.