Silver also dropped on speculative selling from investors.
"The wobbling yellow metal at overseas brought hope of further ease in prices, as it would subscribe demand here amid festivals," dealers said.
Standard gold (99.5 purity) slid by Rs 150 to finish at Rs 31,800 per 10 gm from Monday's closing level of Rs 31,950.
Pure gold (99.9 purity) also dipped by a similar margin of Rs 150 to end at Rs 31,940 per 10 gm from Rs 32,090.
Silver ready (.999 fineness) declined Rs 420 per kg to conclude at Rs 62,660 as compared to Rs 63,080 yesterday.
In Europe, gold slipped on lower euro and stock markets as investors took profits after last week's 6-1/2 month high.
Spot gold was bid down at USD 1,756.09 an ounce in early trade, while silver was bid lower at USD 34.09 an ounce.