Silver also rallied due to increased industrial demand.
Standard gold (99.5 purity) rose by Rs 120 to conclude at Rs 27,325 per 10 grams from overnight Rs 27,205.
Pure gold (99.9 purity) also went up by same margin to finish at Rs 27,475 per 10 grams from Rs 27,355.
Silver (.999 fineness) moved up by Rs 170 to finish at Rs 42,605 per kg as compared to Friday's Rs 42,435.
Globally, the shiny metal settled at near a two-week high on safe-haven demand benefiting from ongoing geopolitical tensions in Iraq as well as weak equity markets. But gains were capped ahead of the Federal Open Market Committee Monetary Policy meet next week.
Gold for August delivery settled higher at USD 1,274.10 an ounce on the Comex division of the NYMEX late yesterday, while silver July contract ended at USD 19.655 an ounce.