Gold lost Rs 300 at Rs 10,300 per ten gram while silver nosedived by Rs 1,300 at Rs 20,000 per kilogram.
The selling pressure triggered on reports of a weak trend in international markets as some investors, who benefited from the metal's surge to a 26-year high this year, sold judging the rally to be overdone.
The decline reversed gains earlier in the day that had come after US consumer prices rose more than expected, fuelling fears of inflation and increasing the attractiveness of bullion as an investment.
Silver plunged on reports of a fall in its prices in overseas markets and reduced offtake by industrial units.
Silver ready dropped by Rs 1,200 at Rs 20,000 per kilo and weekly-based delivery by Rs 170 at Rs 21,715 per kilo.
Silver coins also lost support and fell sharply by Rs 300 each at Rs 23,200 for buying and Rs 23,400 for selling of 100 pieces.
Standard gold and ornaments dropped by Rs 300 each at Rs 10,300 and Rs 10,150 per ten gram respectively. Sovereign held unchanged at Rs 8,200 per piece of eight gram.