Silver fell by Rs 500 to Rs 44,800 per kg on poor offtake by industrial units and coin makers.
Silver coins remained unaltered at Rs 69,000 for buying and Rs 70,000 for selling of 100 pieces.
Traders said stockists selling against sluggish demand at higher levels mainly pulled down both gold and silver prices.
Traders attributed the recovery in gold prices to a better trend in global markets.
Gold prices on Thursday fell from record high by plunging Rs 1,575 to Rs 32,325 per ten gram on profit-selling by stockists driven by recovery in rupee amid a weakening global trend.
Will gold touch the psychological barrier of $720? Investment funds are bullish but cautious.
It has mostly been a one-way street for smallcap stocks that have taken it on their chin thus far in February. The Nifty Smallcap 250 index has shed 3.2 per cent in the current month as compared to the 1.8 per cent decline in the Nifty Midcap 100 and the 0.5 per cent drop in the Nifty 50 index, data showed. Technically, the index has slipped below its 20-day moving average (DMA) placed at 14,800 levels on Monday, and is currently testing the 50-DMA, and is placed at 14,278 levels.
Traders said heavy selling by stockists against fall in demand at prevailing higher levels mainly kept pressure on gold prices.
Gold import from the UAE at a lower rate of duty -- in terms of an agreement -- has posed a survival challenge for the Indian refining industry while hurting the price discovery of the metal, with the India International Bullion Exchange starting operations at GIFT City. The problem has arisen after the government signed the Comprehensive Economic Partnership Agreement (CEPA) with the UAE. Under it, Indian jewellery manufacturers have been allowed to import gold at a concessional rate of 14 per cent against 15 per cent, which is normal.
Globally, gold added 0.4 per cent to $1,228.65 an ounce in Singapore.
Also, the import tariff value -- the base price at which customs duty is determined to prevent under-invoicing -- in case of silver has been reduced to $644 per kg from $694 per kg earlier, a notification by the Central Board of Excise and Customs said.
Silver also dropped by Rs 550 to Rs 40,350 per kg.
Silver followed suit and traded Rs 90 higher at Rs 38,290 per kg on increased offtake by industrial units and coin makers.
Banks cannot function as traders of commodities, including gold, RBI chief general manager (communication) Mumbai Alpana Killawala told PTI over phone when asked about the reason behind the policy.
The precious metal had gained Rs 1,240 in the last eight days.
Silver met with resistance and fell by Rs 200 to Rs 36,000 per kg.
A dedicated physical gold exchange could lead to standard gold pricing in India.
Gold in Singapore, which normally sets price trend on the domestic front, rose 0.3 per cent to $1,199.65 an ounce.
Traders said sentiments turned better after gold recovered from an eight-month low in global markets on speculation that reduced prices may spur purchases before the Federal Reserve begins a two-day policy meeting.
Scattered low level buying by retailers helped gold prices to trade marginally higher.
No form or requisition slip is required for exchange of Rs 2,000 notes up to a limit of Rs 20,000 at a time as part of exercise to withdraw high-value currency notes from circulation. RBI on Friday in a surprise move announced withdrawal of Rs 2,000 currency notes from circulation but gave public time till September 30 to either deposit such notes in accounts or exchange them at banks. Unlike the November 2016 shock of demonetisation, when old Rs 500 and Rs 1,000 notes were invalidated overnight, the Rs 2,000 notes will continue to be a legal tender.
The famed Indian appetite for gold is being manifest with renewed vigour this season as a surge in festival demand and a recent fall in prices has fuelled a virtual 'gold rush' in the market.
Traders said restricted buying from jewellers and retailers mainly kept precious metals at previous levels.
The Modi government's decision to demonetise Rs 500 and Rs 1,000 banknotes will drive up interest in the bullion market
Gold coins are selling at a Rs 100 per 10 gram premium since Guru Pushya Nakshatra, one of the most auspicious occasions for buying precious metals in western Indian states.
Gold importers in India, the world's largest consumer, are expected to stay out of the markets on Thursday in anticipation of volatile prices with the start of US-led military assault on Iraq, traders said.
Traders said stockists selling on sluggish demand at prevailing higher levels mainly kept pressure on the two commodities.
Silver ready ruled flat at Rs 44,600 per kg, while weekly-based delivery shed Rs 80 to Rs 43,780 per kg on lack of speculators' buying support.
Gold in Singapore, which normally sets price trend on the domestic front, fell by 0.3 per cent to $1,180.78 an ounce.
Silver, however, remained weak and fell by Rs 130 to Rs 39,600 per kg due to slackened demand from industrial units.
Gold is playing a decisive role in the present economic scenario as inflation and recession have eaten the vital parts of every country's economy. Most investors prefer to invest their money in gold these days. Most traders think that this is the good time to squeeze maximum benefit from the collapsing economy. With the markets now concerned about inflation, gold has posted its credentials separately from its role as a mitigator of financial and political risk.
Gold prices recovered by Rs 85 to Rs 26,625 per 10 grams at the bullion market.
Silver coins also tumbled by Rs 1,000 to Rs 52,000 for buying and Rs 53,000 for selling of 100 pieces.
After falling for three straight days, gold prices recovered by Rs 50 to Rs 26,700 per ten grams at the bullion market on Friday.
Silver also eased by Rs 200 to Rs 38,200 per kg on reduced offtake by industrial units and coin makers.
Tracking a weak trend overseas and low demand from domestic jewellers and retailers, gold prices plunged by Rs 200 to Rs 26,350 per ten gram in New Delhi on Monday.
Silver was also up by 1.63 per cent to $15.92 an ounce.
The metal has gained Rs 860 in last six trading sessions.
