Gold advances on steady demand amid global cues; silver drops

Gold prices continued to accelerate at the bullion market here on the back of consistent buying from stockists and retailers largely driven by extremely bullish overseas sentiment.

In contrast, silver fell back owing to modest profit taking after recent upsurge.

Standard gold (99.5 purity) rose by Rs 35 to settle at Rs 27,750 from weekend's closing level of Rs 27,715.

Pure gold (99.9 purity) also moved up by a similar margin to end at Rs 27,900 per 10 grams compared to Rs 27,865.

Silver (.999 fineness), however dropped by Rs 120 to conclude at Rs 39,450 as against last Saturday's finish of Rs 39,570.

On the global front, the yellow-metal rallied to the highest level in more than four months on safe haven status following heightened volatility in financial markets resulting from the Swiss National Bank's surprise decision to scrap its currency ceiling and also expecations of major stimulus plan from the European Central Bank.

Spot gold was bid higher at $1278.00 in early European trading.