Silver also dropped owing to mute demand from jewellery and coin makers.
Standard gold (99.5 purity) shed by Rs 110 to finish at Rs 27,535 per 10 grams from Monday's closing level of Rs 27,645.
Pure gold (99.9 purity) fell by Rs 115 to conclude at Rs 27,680 per 10 grams from Rs 27,795. Silver (.999 fineness) declined by 130 to close at Rs 41,520 per kg as against Rs 41,650 yesterday.
Globally, the shiny metal continued to languish below the key USD 1,300 an ounce mark amid investors' caution ahead to the release of important US data later in the day.
Spot gold was bid lower at USD 1,286.70 an ounce in the early European trade.