Gold dipped below the psychological Rs 28,000 level as stockists reduced their positions in tandem with a steep fall in precious metals in global markets.
On hectic selling by stockists and reduced offtake by industrial units on the back of a weak global trend silver lost Rs 5,000 to Rs 54,000 per kg.
Dealers said that selling pressure in the precious metals remained intact as gold fell on investor sales following routs in global equity and commodity markets.
Gold in global markets, which normally sets the price trend on the domestic front, fell sharply by USD 101.90, or 5.9 per cent to settle at USD 1,639.80 an ounce on the Comex.
On the domestic front, gold of 99.9 and 99.5 per cent purity recorded a steep fall of Rs 700 each to Rs 27,340 per 10 grams and Rs 27,190 per 10 grams, respectively.
Gold yesterday closed at 28,040 per 10 grams in the bullion market in the national capital. Sovereign followed suit and tumbled by Rs 1,500 to Rs 21,200 a piece of 8 grams.
In a similar fashion, silver ready nosedived by Rs 5,000 to Rs 54,000 per kg. It had plunged by Rs 5,500 yesterday.
Silver weekly-based delivery plummeted by Rs 5,005 to Rs 53,760 per kg, after losing Rs 5,535 in the previous session.
Silver coins also recorded a steep fall of Rs 4,500 to Rs 61,000 for buying and Rs 62,000 for selling of 100 pieces.