Silver also rallied for the fifth straight session and rose by Rs 400 to Rs 65,500 per kg on increased demand from speculators and industrial units.
Dealers said that trading sentiment remained firm after gold gained for a third day in London as concerns of slowing economic growth and Europe's debt woes spurred demand for the precious metal as an alternate investment option.
Gold in global markets, which normally sets the price trend on the domestic front, rose by USD 10.75 to USD 1,893.63 an ounce in London. It had hit a record USD 1,913.50 on Aug23.
Scattered buying for the upcoming marriage season and shifting of funds from weak equity markets to bullion also bolstered the trading sentiment to some extent, they added.
On the domestic front, gold of 99.9 and 99.5 per cent purity rose by Rs 90 each to Rs 28,280 and Rs 28,140 per 10 grams, respectively. The metal had gained Rs 660 in the last two trading sessions.
Sovereign followed suit and moved up by Rs 100 to Rs 22,600 per piece of eight grams. In line with a general firm trend, silver ready gained Rs 400 to touch Rs 65,500 per kg. It had gained Rs 2,600 in the previous four sessions.
Silver weekly-based delivery rose by Rs 580 to Rs 66,415 per kg after gaining Rs 4,870 in the previous four sessions.
However, silver coins lacked necessary buying support at existing higher levels and dipped by Rs 1,000 to Rs 72,000 for buying and Rs 73,000 for selling of 100 pieces.