However, silver managed to close higher on increased offtake by industrial units.
Traders attributed the steepest one-week fall in gold prices to offloading of positions by stockists after the Reserve Bank eased restrictions on import of the yellow metal, allowing select trading houses, in addition to already permitted banks, to procure the precious metal to boost exports.
The Reserve Bank's move to ease gold import norms is likely to increase official supplies in the domestic market.
Besides, investors shifting their funds from weakening bullion to rising equities and strengthening rupee against the dollar, making the import of gold cheaper weighed on the yellow metal prices, they said.
Globally, gold in New York, which normally set price trend on the domestic front, dropped 0.1 per cent at USD 1,291.90 an ounce during the week.
In the national capital, gold of 99.9 and 99.5 per cent purity commenced higher at Rs 29,580 and Rs 29,380 per ten gram on some buying support. Subsequently, it lost its sheen on heavy stockists selling tumbled to Rs 28,250 and Rs 28,050, before closing at Rs 28,320 and Rs 28,120 per ten gram respectively, the lowest levels since August last year, showing a significant fall of Rs 1,220 each.
Sovereign followed suit and lost Rs 100 at Rs 24,800 per piece of eight gram.
However, in volatile movements, silver ready ended higher by Rs 100 to Rs 41,500 per kg while weekly based delivery lost Rs 400 to close at Rs 40,800 per kg on lack of speculators' support.
Silver coins plunged by Rs 1,000 to Rs 78,000 for buying and Rs 79,000 for selling of 100 pieces on poor demand at higher levels.