Silver followed suit and declined by Rs 550 to Rs 37,850 per kg on poor offtake by industrial units and coin makers.
Traders said sentiments turned bearish after gold fell to three-week low in global markets as a stronger dollar curbed demand after the Federal Reserve ended its asset-purchase programme because of an improving labour market.
Gold in London, which normally sets price trend on the domestic front, dropped 0.7 percent to USD 1,203.22 an ounce, and silver by 1.3 percent to USD 16.86 an ounce.
Shifting of funds towards surging equity market and sluggish demand at prevailing levels also dampened the sentiment, they said.
In Delhi, gold of 99.9 and 99.5 percent purity plungedby Rs 400 each to Rs 27,100 and Rs 26,900 per 10 grams, respectively, a level last seen on October 6.
Sovereign followed suit and shed Rs 100 at Rs 24,100 per piece of eight grams.
In a similar fashion, silver ready dropped by Rs 550 to Rs 37,850 per kg and weekly-based delivery by Rs 660 to Rs 37,560 per kg.
Silver coins also plummeted by Rs 1,000 to Rs 65,000 for buying and Rs 66,000 for selling of 100 pieces.