Gold prices surged Rs 2,700 to scale a new peak of Rs 1,18,900 per 10 grams in the national capital amid sustained global demand for the safe-haven asset while rupee touching a new low facing the brunt of US H-1B visa fee hike.

According to the All India Sarafa Association, the yellow metal of 99.9 per cent purity had closed at Rs 1,16,200 per 10 grams in the previous market session.

In the local bullion market, gold of 99.5 per cent purity rallied Rs 2,650 to hit a record high of Rs 1,18,300 per 10 grams (inclusive of all taxes). It had settled at Rs 1,15,650 per 10 grams on Monday.

Traders said the rupee's steep fall against the US dollar added to the rally of the precious metal.

Silver prices also skyrocketed by Rs 3,220 to hit an all-time high of Rs 1,39,600 per kilogram (inclusive of all taxes) on Tuesday. The white metal had ended at Rs 1,36,380 per kg in the previous session.

On Tuesday, the rupee depreciated 47 paise to hit an all-time low of 88.75 (provisional) against the US dollar, amid sustained outflow of foreign funds on the back of a steep hike in US H-1B visa fee that is expected to give a big blow to Indian IT services exports.

In the international markets, spot gold rose more than 1 per cent to hit a record high of USD 3,791.10 per ounce.

Spot silver was trading 0.57 per cent higher at USD 44.32 per ounce.