Silver, on the other hand, held steady at Rs 60,600 per kg on scattered buying by industrial units.
Traders said sentiment in gold turned bearish after the metal fell to a two-week low in overseas markets as the dollar rose amid concern that the crisis in Spain is worsening, crimping demand for the metal as an alternative investment.
In New York, gold retreated 0.7 per cent to USD 1,753.60 an ounce, after dropping to USD 1,738.30, the lowest since September 13.
Besides, poor demand at prevailing higher levels and shifting of funds by investors from bullion to equity further led to the decline in gold.
Back home, gold of 99.9 and 99.5 per cent purity plunged by Rs 250 each to Rs 31,850 and Rs 31,650 per 10 grams, respectively.
Sovereign declined by Rs 50 to Rs 25,400 per piece of eight grams.
Silver ready held steady at Rs 60,600 per kg on limited deals by industrial units, while weekly-based delivery rose by Rs 70 to Rs 62,520 per kg on speculators buying support.
Silver coins moved up by Rs 1,000 to Rs 77,000 for buying and Rs 78,000 for selling of 100 pieces following an upsurge in demand ahead of marriage season.
