Gold prices on Thursday held on to their losses from the previous session, when they fell 1 percent on a strong dollar, after Federal Reserve Chair Janet Yellen advocated lifting U.S. interest rates gradually.
Spot gold had risen 0.3 percent to $1,205.93 per ounce by 0324 GMT. On Monday, it marked its highest in more than seven weeks at $1,207.86.
Traders said markets were receiving some support from top crude exporter Saudi Arabia, which said it would adhere strictly to its commitment to cut output under the global agreement among oil producers including the Organization of the Petroleum Exporting Countries (OPEC) and Russia.
Silver recaptured the Rs 41,000-mark by rising Rs 250 to Rs 41,200 per kg on increased offtake by industrial units and coin makers.
Gold imports were worth $3.80 billion in December last year, the official data released today showed.
"In India, the government's decision to remove large denomination rupee notes took around 86 per cent of India's circulating cash out of its economy," according to the Outlook 2017 - Global Economic Trends and their impact on gold, released by WGC.
The government imposed the anti-dumping duty on products imported from China and European nations for a period not exceeding six months, the circular said.
In the national capital, gold of 99.9 per cent and 99.5 per cent purity climbed by Rs 200 each to Rs 29,450 and Rs 29,300 per 10 grams, a level last seen on November 29.
U.S. crude futures settled up 76 cents to $53.01 a barrel, a gain of 1.5 percent. Brent crude oil settled up 91 cents, or 1.7 percent, at $56.01, off the session high of $56.43 a barrel.
Spot gold was up 0.5 percent at $1,197.64 an ounce by 2:35 p.m. EST (1935 GMT), after touching $1,206.98, its loftiest since Nov. 23. U.S. gold futures settled up 0.3 percent at $1,199.80 per ounce.
In the national capital, gold of 99.9 per cent and 99.5 per cent purity surged by Rs 150 each to Rs 29,250 and Rs 29,100 per ten grams, respectively.
The Iraqi oil ministry said on Tuesday that it had cut its production by 160,000 barrels per day since the beginning of January. By the end of the month, production would be cut by 210,000 bpd, it said.
Traders said that a crude oil and refined product inventory report published by the US Energy Information Administration late on Wednesday had sent mixed messages to the market.
US stocks lost ground in choppy trading, led by drug stocks after US President-elect Donald Trump said pharmaceutical companies were "getting away with murder" by charging high drug prices.
Firm global prices and increased buying activity by jewellers kept the metal prices higher.
Saudi's February supply reductions to a handful of Asian refiners mark the start of cuts to a region left untouched in January at the onset of the OPEC output deal.
India's fuel demand in 2016 grew at its fastest in at least 16 years as low oil prices boosted demand for gasoline and aviation fuels, but analysts say the country's currency troubles will put the brakes on this year.
Tata Steel rose as much as 4.4 per cent to Rs 450 while JSW Steel jumped nearly 10 per cent to Rs 195.45 at day's highs, leading a 4.4 per cent gain in the BSE Metal index.