Industrial metal, silver, too recovered and closed above the key Rs 43,000 per kilo mark owing to good speculative off-take.
Emergence of fresh buying by stockists to meet the upcoming festive season demand and better global trend mainly led recovery in gold prices, a bullion trader said.
The metal had lost nearly Rs 700, or 2.53 per cent.
Standard gold (99.5 purity) spurted by Rs 155 to end at Rs 27,815 per 10 grams from Monday's closing level of Rs 27,660.
Pure gold (99.9 purity) also rose by same margin to finish at Rs 27,965 per 10 grams against Rs 27,810 previously.
Silver (.999 fineness) surged by Rs 265 to conclude at Rs 43,240 per kg as compared to Rs 42,975 yesterday.
Globally, the yellow-metal rallied nearly one per cent after hitting multi-month low on back of hectic short-covering as well as bargain hunting, though gains were capped due to strong dollar and firm equities.
Spot gold jumped to USD 1,289.30 an ounce in early European trade.