Traders said the subdued demand at prevailing higher levels was mainly due to the start of "Shradhs", a period considered inauspicious in Hindu mythology for purchasing new things.
Silver also lost Rs. 400 to touch Rs. 60,600 per 1 kg.
For the December 2012 futures, gold was trading at Rs. 31,312 on the Multi Commodity Exchange.
Gold prices have been rising since September as falling currencies force investors to seek safe havens.