In tandem with gold prices, silver also dropped by Rs 1,273 to Rs 49,187 per kilogram.
In the international market, gold prices ruled at USD 1,530 an ounce in New York while silver was quoted at USD 18.50 an ounce.
Traders said subdued demand from local jewellers led to the fall in gold prices.
Gold prices have been hitting a fresh high everyday since Tuesday.
Traders attributed the gain in gold to increase in the domestic spot market demand.
Rising price to drag gold sales to the lowest in three years.
Pick-up in demand from local jewellers at the domestic spot market led to the rise in gold prices, analysts said.
Silver, however, plunged Rs 1,150 to Rs 43,000 per kg on reduced offtake by industrial units and coin makers.
Silver surged Rs 630 to hit Rs 44,300 per kg on increased offtake by industrial units and coin makers.
Tracking gold, silver also declined by Rs 80 to Rs 43,020 per kg on reduced offtake by industrial units and coin makers.