Rupee tumbled amid growing worries over economic slump and sustained foreign fund outflows.
A sense of caution prevails among investors who are awaiting some measures from the government to arrest demand slowdown.
Gold is trading at Rs 38,570 per 10 gram in the national capital, tracking weak trend overseas and lacklustre demand from jewellers.
The rupee opened at 71.12, then gained momentum and touched a high of 71.05.
Participants are also awaiting measures from the government to boost growth and revive consumer sentiment, experts added.
FPIs, however, invested a net Rs 2,096.38 crore in the debt securities during the period.
Reliance Industries Ltd (RIL) was the only firm among the top 10 companies to post a gain in its market valuation.
After swinging 470 points during the day, the 30-share Sensex settled 38.80 points, or 0.10 per cent, higher at 37,350.33.
Pick-up in demand from local jewellers at the domestic spot market led to the rise in gold prices, analysts said.
Analysts said speculative positions created by traders led to rise in oil prices.