Silver followed suit and plunged by Rs 800 to Rs 42,000 per kg.
Traders said sentiments dampened after gold fell the most in three weeks in overseas markets on speculation that the Federal Reserve would further curb monetary stimulus as the US economy recovers, reducing demand for the metal as an alternative investment.
Globally, gold in New York, which normally sets price trend on the domestic front, fell by 1.5 per cent to USD 1,288.90 an ounce, the biggest decline since April 15 and silver lost 1.5 per cent to USD 19.34 an ounce.
In Delhi, gold of 99.9 and 99.5 per cent purity tumbled by Rs 350 each to Rs 30,400 and Rs 30,200 per ten gram respectively. It had gained Rs 70 in the previous two days.
Sovereign, however, held steady at Rs 25,100 per piece of eight gram in limited deals.
Silver ready dropped by by Rs 800 to Rs 42,000 per kg, while weekly-based delivery by Rs 850 to Rs 41,900 per kg.
On the other hand, silver coins held steady at Rs 80,000 for buying and Rs 81,000 for selling of 100 pieces in restricted deals.