The metal had touched an all-time high of Rs 28,540 per 10 grams on Monday. Silver also tumbled by Rs 1,300 to Rs 65,000 per kg on reduced industrial offtake.
The trading sentiment turned bearish after gold dropped for the first time in seven days in London, as some investors sold the metal at record prices.
Gold in global markets, which normally sets the price trend on the domestic front, fell by USD 12.42 to USD 1,885.18 an ounce in London after touching a record level of USD 1,913 per ounce yesterday.
The absence of physical buying, due to investors shifting their funds to firming equity markets, also influenced the trading sentiment to some extent.
On the domestic front, gold of 99.9 per cent and 99.5 per cent purity fell by Rs 350 each to Rs 28,190 and Rs 28,040 per 10 grams, respectively. Sovereigns, however, held steady at Rs 22,500 per piece of eight grams on account of restricted buying support.
In line with the general weakening trend, silver ready tumbled by Rs 1,300 to Rs 65,000 per kg and weekly-based delivery by Rs 1,885 to Rs 64,600 per kg. Silver coins also shed Rs 1,500 to 72,000 for buying and Rs 73,000 for selling of 100 pieces.