Silver also spurted by Rs 1,800 to Rs 44,900 per kg on increased offtake by industrial units and coin makers.
Sentiment bolstered after gold rose the most since September 2013 in global markets as the dollar weakened, amidst expectations that borrowing costs in the US will remain low.
The worsening crisis in Iraq also fuelled demand for bullion as an alternative investment.
Gold in global markets, which normally sets price trend on the domestic front, climbed to USD 1,322.12 an ounce in Singapore, the highest level since April 12.
In additions, depreciating rupee against the dollar which make imports of gold costlier also influenced the sentiment, they said.
In Delhi, gold of 99.9 and 99.5 per cent purity surged by Rs 605 each to Rs 28,625 and Rs 28,425 per ten gram respectively, a level last seen on May 22. Sovereign followed suit and shot up by Rs 300 to Rs 24,900 per piece of 8 gram.
In a similar fashion, silver ready spurted by Rs 1,800 to Rs 44,900 per kg and weekly-based delivery by Rs 1,900 to Rs 44,380 per kg. Silver coins zoomed by Rs 3,000 to Rs 80,000 for buying and Rs 81,000 for selling of 100 pieces.