The S&P cut in Spain's credit rating to "BBB+" from "A" renewed fears on the euro debt crisis weighed on the sentiments.
MCX spot gold rose and was seen trading at Rs 29,025 per 10 grams, while silver rose Rs 55,673 per kgs.
Historically, gold and dollar share an inverse relationship with each other and the recent spike in dollar has weighed gold down.
The Indian Rupee has touched a low of 52.60 against the dollar on Friday, which is driving gold down again. The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.
Overseas spot gold stood at $1,655 a troy ounce.
On the domestic front, gold of 99.9 and 99.5 per cent purity added Rs 100 each to Rs 29,440 and Rs 29,300 per 10 grams, respectively.