Gold went steady at Rs 29,550 per 10 grams in scattered deals even as it strengthened overseas.
In the national capital, gold of 99.9 and 99.5 per cent purity declined by Rs 50 each to Rs 29,550 and Rs 29,400 per ten grams, respectively. The precious metal had lost Rs 150 yesterday.
Brent crude futures, the international benchmark for oil prices, were trading at $55.25 per barrel at 0112 GMT, virtually unchanged from their last close.
While energy consumption will grow by 4.2 per cent per annum -- faster than all major economies in the world -- India's consumption growth of fossil fuels would be the largest in the world.
A rally in the US stock markets that saw Dow Jones crossing 20,000 yesterday for the first time, along with stronger American currency and treasury yields, hit the precious metals' safe haven appeal.
Traders said that the increase was largely down to a weakening dollar, which has lost 3.9 per cent in value since its January peak. Since oil is traded in dollar, a cheaper greenback makes fuel purchases less costly for countries using other currencies, potentially spurring demand.
Mineral Exploration Corp has started exploring the reserves at Kolar Gold Fields, in Karnataka, to get a better estimate of the deposits, according to three government officials and a briefing document prepared by the central mines ministry that was seen by Reuters.
Spot gold was mostly unchanged at $1,217.42 per ounce by 0337 GMT, after hitting their strongest since Nov. 22 at $1,219.59 earlier in the session.
U.S. drillers added the most rigs in nearly four years last week, data from energy services company Baker Hughes showed on Friday, extending an eight-month drilling recovery.
It is a must to bring down the taxes on gold if the government wants to promote transparency in the sector following demonetisation, a WGC official said.
Bullion traders attributed the recovery in gold prices to a firm trend overseas as the weakness in dollar boosted demand for the precious metals as a safe haven.
Spot gold rose 0.7 percent, to $1,217.81 per ounce by 0303 GMT. It earlier touched a high of $1,219.43, the most since Nov. 22.
Crude oil had traded higher earlier in the session on the back of output cuts by OPEC and other producers.
Kuwait chairs the five-member committee which also includes Algeria, Venezuela, Russia and Oman.
Total imports of the precious metal in the corresponding period of 2015-16 stood at $26.4 billion.
Gold fell by 1.1 percent on Wednesday, the most since Dec. 15, after Yellen's remarks lifted the dollar by as much as 2 percent, making gold more expensive for holders of other currencies.