However, silver continued its rising trend on sustained buying by coin makers and rose further by Rs 200 to Rs 43,100 per kg.
Traders said fall in demand from jewellers and recovery in the rupee's value in the forex market, making import costs cheaper, led to the fall in gold prices.
Globally, gold was trading at USD 1,278.54 an ounce from USD 1,277.71 yesterday in Singapore.
In Delhi, gold of 99.9 and 99.5 per cent purity declined by Rs 30 each to Rs 28,020 and Rs 27,820 per ten gram respectively. It had gained Rs 150 yesterday. Sovereign, however, held steady at Rs 24,600 per piece of 8 gram in limited deals.
On the other hand, silver (ready) advanced by Rs 200 to Rs 43,100 per kg and weekly-based delivery by Rs 310 to Rs 42,480 per kg. The white metal had gained Rs 300 in yesterday's trade.
Meanwhile, silver coins continued to be sought after at the last level of Rs 77,000 for buying and Rs 78,000 for selling of 100 pieces.