New Delhi: The Rupee on Monday strengthened by 26 paise against the US dollar in early trade following increased dollar selling by exporters and banks but it gave up all its gains in late trade and ended with a two paise gain only.
The rupee depreciated to close at Rs 48.42 against the dollar.
Meanwhile, gold prices surged to 11-week high levels by gaining Rs 260 to Rs 13,725 per 10 gram in New Delhi on hectic buying by stockists in line with a firming global trend.
A similar firmness was noticed in silver that surged by Rs 400 to Rs 17,850 per kg on rising demand from industrial units.
The gold, which normally moves in tandem with the firm overseas trend, attracted buyers as it rose 2.4 per cent to 890.49 dollar an ounce in Asia after Israel called up reservists following two days of air attacks against the Hamas-led Gaza strip.
Market analysts said stockists were enlarging their positions on expectations that the prices might surge as mounting tension would spur demand for gold as a safe hedge during such a crisis.
They said the precious metal is slowly moving closer to the record levels as volatile equities, weak dollar and rising crude left no other option to park funds in the gold.
Crude oil, too, rose for a second day after Israeli air strikes in the Gaza strip raised concerns that supply from the Middle East, the world's largest producing region, may be disrupted.
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