Gold prices fell by Rs. 250 to Rs. 31,850 per 10 grams in the bullion market in New Delhi on Thursday on lack of demand at existing higher levels amid a weak global trend.
Silver, on the other hand, held steady at Rs. 60,600 per kg on scattered buying by industrial units.
Traders said sentiment in gold turned bearish after the metal fell to a two-week low in overseas markets as the dollar rose amid concern that the crisis in Spain is worsening, crimping demand for the metal as an alternative investment.
In New York, gold retreated 0.7% to $1,753.60 an ounce, after dropping to $1,738.30, the lowest since September 13.
Besides, poor demand at prevailing higher levels and shifting of funds by investors from bullion to equity further led to the decline in gold.
Back home, gold of 99.9 and 99.5% purity plunged by Rs. 250 each to Rs. 31,850 and Rs. 31,650 per 10 grams, respectively.
Sovereign declined by Rs. 50 to Rs. 25,400 per piece of eight grams.
Silver ready held steady at Rs. 60,600 per kg on limited deals by industrial units, while weekly-based delivery rose by Rs. 70 to Rs. 62,520 per kg on speculators buying support.
Silver coins moved up by Rs. 1,000 to Rs. 77,000 for buying and Rs. 78,000 for selling of 100 pieces following an upsurge
in demand ahead of marriage season.