Gold had closed at Rs 38,538 per 10 gram on Tuesday.
Forex traders said easing crude oil prices supported the rupee.
The 30-share Sensex was trading 207.41 points, or 0.51 per cent, higher at 41,028.71 in morning session.
Companies across India—big and small—are grappling with a slowing economy amid waning consumption.
Target cut to $1,485 an ounce; prices may go up next year.
In a fillip to forex markets, foreign investors continued with their bullish outlook and bought equities worth Rs 960.90 crore.
After scaling its record intra-day high of 41,120.28, the 30-share BSE Sensex settled 67.93 points, or 0.17 per cent, lower at 40,821.30.
Silver also fell marginally by Rs 39 to Rs 45,161 per kg from Rs 45,200 per kg in the previous trade.
The rupee moved up to trade at 71.66 following strong gains in equity markets.
The 30-share Sensex was trading 218.82 points, or 0.54 per cent, higher at 41,108.05.