Silver also plummeted on the back of speculative selling coupled with subdued industrial off-take.
A rising rupee, which ended at an 11-month closing high of 58.79 against the US unit, and sharp surge in equities in a sentiment-driven rally after the BJP-led NDA's massive poll win weighed heavily on trading, a bullion trader said.
Standard gold (99.5 purity) dropped by Rs 355 to end at Rs 29,160 per 10 grams from overnight level of Rs 29,515.
Pure gold (99.9 purity) also slumped by a similar margin to finish at Rs 29,310 per 10 grams from Rs 29,665.
Silver (.999 fineness) tanked by Rs 700 to conclude at Rs 42,020 per kg as against Rs 42,720 yesterday.
Globally, the yellow metal lost its safe-haven appeal and retreated below the important USD 1,300 an ounce mark on encouraging US economic data as well as selling by funds.
Gold for June delivery dropped to settle at USD 1,293.60 an ounce on Comex division of the NYMEX late yesterday, while silver July contact slipped to end at USD 19.48 an ounce.