On Friday, when dollar slid due to economic worries and signs of strengthening in investment demand as the recession deepened, it enhanced appeal of gold as an alternative investment. The futures contracts for Gold ended higher.

Since disruption turmoil in the financial markets and fears over the outlook for the global economy boost bullion's appeal, the demand for investment in the precious metal remains strong. In the recent times, demand for physical gold from ETFs has been a major factor supporting prices.

Bombay Bullion Association has declared that India's gold imports fell 26-35 percent in November as high prices ruled out any chance of reviving the sagging demand during the wedding season.

Suresh Hundia, president of the Bombay Bullion Association said, gold imports by India, the world's biggest consumer of the metal, were around 35-40 tonnes in November, compared with 54 tonnes in the same month a year earlier.

Global slowdown failed to affect gold prices in India. Gold prices registered a growth of 66 per cent in the third quarter of 2008. Investors across the world preferred to invest in gold, considering it as the best investment option amid volatile market conditions, following the global slowdown.

The demand for yellow metal in India increased to 250 tonnes in the third quarter of 2008, which earlier stood at 190 tonnes in same period of 2007.

The demand for gold and silver witnessed a rise on the beginning of the auspicious occasion of Vikram Samvat 2065. Prices of silver increased by Rs 95 per kg and closed at Rs 17,370 while the prices of gold increased by Rs 245 and closed at Rs 12,100. The Bombay Bullion Association said that industrial and ornament users preferred purchase of these metals as a best investment mode amid the volatile financial markets.

Some buying in precious metals was witnessed on occasion of Dhanteras and 'Lakshmi Poojan' as it is considered an auspicious occasion for buying gold and silver as per Indian traditions.

After four day's continuous fall, precious metal Gold finally settled the day at Rs 12,030 on bullion market, higher by Rs 500 per ten grams, on fresh festival demand. In addition, Silver also recovered on renewed industrial demand.  

According to market experts, Gold finished higher in global market as safe-haven buying emerged on fears that global stocks markets were heading into a free fall.  

Tracking weak global cues, Stock markets around the globe took severe beating on 
Friday and oil prices plunged to $ 62.85 per barrel, their lowest in more than a year. 

Even gold, the traditional safe haven in times of panic, fell sharply below Rs 12,000-mark, as a rising dollar and stock-market losses forced investors to sell the metal to raise cash.

Standard gold and ornaments dropped by Rs 500 each at Rs 11,950 and Rs 11,700 per ten gram respectively. 

According to market analysts, people are liquidating gold and other commodities as their losses in stock markets deepen. They said the credit crisis and rising concerns of global inflation keep mounting pressure on the stock markets everywhere.