The yellow metal witnessed some token buying but failed to take off on Dhanteras, a day considered auspicious for buying gold, silver and other valuables and is largely celebrated in North and West India.
A weak trend overseas as the dollar strengthened against a basket of major currencies, eroding the appeal of the metal as a safe haven, mainly led to the fall in gold prices.
Silver also recorded a fall of Rs 400, to Rs 41,000 per kg, even as retailers made token buying in coins.
Globally, gold fell 0.45 per cent to trade at $ 1,288.70 an ounce in Singapore, while silver shed 0.64 per cent to $ 17.09 an ounce.
In the national capital, gold of 99.9 and 99.5 per cent purity fell by Rs 140 each to Rs 30,710 and Rs 30,560 per 10 grammes, respectively.
Sovereign, however, continued to be enquired at Rs 24,700 per piece of eight grammes.
Bullion traders said sales were higher by up to 20 per cent on a daily basis as people bought gold as investment and sales are expected to pick up later in the day.
The government's revocation of an order that mandated PAN and Aadhaar for purchases above Rs 50,000 also spurred retail buying but weak trend overseas weighed on the gold prices.
In futures trading at the MCX, gold for delivery in December too was down by Rs 104, or 0.35 per cent at Rs 29,750 per 10 grammes.
In tandem with the overall trend, silver ready also dropped by Rs 400 to Rs 41,000 per kg, while weekly-based delivery was down Rs 490 at Rs 39,990 per kg.
Silver coins remained unaltered at Rs 74,000 for buying and Rs 75,000 for selling of 100 pieces on some support.
Meanwhile, gold prices have gone up marginally by Rs 120, or 0.39 per cent, while silver has dropped by Rs 1,700, or almost 4 per cent from last year's Dhanteras.
Photograph: Rupak De Chowdhuri/Reuters.
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