Silver followed suit and lost Rs 965 to Rs 61,435 per kg owing to reduced offtake by industrial units and coin makers.
Traders said poor demand at prevailing higher levels and a weakening trend in overseas markets mainly influenced gold prices.
Gold in New York, which normally sets the price trend on the domestic front, dropped by USD 19.20 to USD 1,696.80 and silver by 2.23 per cent to USD 32.91 an ounce.
Reduced offtake by industrial units and coin makers kept pressure on silver prices, they said.
On the domestic front, gold of 99.9 and 99.5 purity fell further by Rs 200 each to Rs 31,680 and Rs 31,480 per 10 grams, respectively. It had lost Rs 120 yesterday. Sovereigns also lost Rs 50 to Rs 25,500 per piece of eight grams.
In line with a general weakening trend, silver ready dropped by Rs 965 to Rs 61,435 per kg and weekly-based delivery by Rs 640 to Rs 62,835 per kg. Silver coins plunged by Rs 1,000 to Rs 79,000 for buying and Rs 80,000 for selling of 100 pieces.