Silver also weakened further following heavy unwinding from speculators amid reduced industrial demand.
Standard gold (99.5 purity) dropped by Rs 235 to close at Rs 27,800 per 10 grams from Tuesday's level of Rs 28,035.
Pure gold (99.9 purity) dipped by Rs 230 to finish at Rs 27,950 per 10 grams from Rs 28,180 previously.
Silver (.999 fineness) slumped by Rs 555 to end at Rs 45,055 per kg as against overnight close of Rs 45,610.
In New York, gold prices reversed earlier gains to close lower for a third session yesterday in the wake of dovish comments from Federal Reserve Chairwoman Janet Yellen.
Gold for August delivery slid to USD 1,297.10 an ounce (28gm) on the Comex division of the NYMEX late yesterday, while silver slipped to USD 20.89 an ounce.