Gold prices suffered the steepest fall in a week on Thursday falling by Rs 1,250 to Rs 30,950 per ten grams here on heavy sell-off by stockists as equity markets and rupee recovered after RBI's fresh measures.
Silver also plunged by Rs 1,800 to Rs 53,700 per kg on poor offtake by industrial units and weakening trend in overseas markets.
Traders said the precious metals fell sharply following fast recovery in rupee against the dollar after the new RBI chief announced measures to boost economic growth.
The rupee was trading higher by 84 paise at Rs 66.24 per dollar, while stock markets were up by over 2%, denting the appeal of gold considered as safe haven for investors during economic turbulences.
New RBI governor Raghuram Rajan came out with a slew of measures to rescue the battered financial markets to boosting growth.
Traders said a weakening trend in overseas markets on expectations for reduced stimulus in the US and limited military strikes against Syria, further influenced sentiment.
Gold in Singapore, which normally sets price trend on the domestic front, fell 0.7% to 1,381.35 dollar an ounce and silver by 0.9% to 23.27 an ounce.
On the domestic front, gold of 99.9% and 99.5% purity suffered Rs 1250 loss each to quote at Rs 30,950 and Rs 30,750 per ten grams respectively. It had gained Rs 1,100 in last two sessions.
Sovereign declined by Rs 200 to Rs 25,100 per piece of eight gram.
Silver ready dropped by Rs 1,800 to Rs 53,700 per kg and weekly-based delivery by Rs 2400 to Rs 54,600 per kg.
Silver coins also fell by Rs 1,000 to Rs 88,000 for buying and Rs 89,000 for selling of 100 pieces.