Silver also moved down by Rs 350 to Rs 59,400 per kg on reduced offtake by industrial units and coin-makers.
Traders said profit-selling at prevailing higher levels on the back of sluggish demand mainly led to fall in gold and silver prices.
They said a weak overseas trend as gold fell to one-week low after reports that China's manufacturing expanding at the fastest pace in two years and the International Monetary Fund said global growth will accelerate this year, curbing haven demand also dampened the sentiment.
Gold in global markets, which normally set price trend on the domestic front, dropped 0.5 per cent to USD 1,677.65 an ounce, the lowest price since January 17 and silver slumped 1 per cent to USD 31.92 an ounce in Singapore.
On the domestic front, gold of 99.9 and 99.5 per cent purity drifted by Rs 95 each to Rs 31,290 and Rs 31,090 per 10 grams, respectively. The metal had gained Rs 380 in last two days. Sovereigns held steady at Rs 25,500 per piece of eight grams.
In line with a general weak trend, silver ready lost Rs 350 to Rs 59,400 per kg and weekly-based delivery by a similar margin to Rs 59,400 per kg.
On the other hand, silver coins maintained steady trend at Rs 84,000 for buying and Rs 85,000 for selling of 100 pieces.