Silver also dropped by Rs 400 to Rs 35,650 per kg.
Gold has bounced back gaining Rs 825 in the last eight days.
Traders said stockists selling against sluggish demand at higher levels mainly pulled down both gold and silver prices.
Investors, including large corporations, view them as a potential hedge against uncertainty, and mainstream investment banks too are jumping into the game.
The government on Friday slashed the import tariff value on gold to $398 per ten grams while raising it marginally on silver to $643 per kg in line with global trends.
Bullion traders said besides increased buying by jewellers and retailers to meet festive season demand, a firming global trend amid escalating tensions over Ukraine has raised demand for a safe-haven, resulting into influence on gold prices here too.
Gold prices surged by Rs 150 to trade at fresh three-month high of Rs 27,575.
Silver also slumped by Rs 1,700 to Rs 37,200 per kg.
Silver also shot up by Rs 400 to Rs 34,400 per kg.
Gold fell by Rs 170 to Rs 31,680 per ten grams in the national capital on Monday on stockists selling on the back of sluggish demand amid weak global trend.
Gold in London, which normally sets price trend on the domestic front, fell by 0.1 per cent to $1,314.99 an ounce and silver by 0.3 per cent to $20.91 an ounce.
Gold slips by Rs 150 on low demand.
Silver also turned weak and declined by Rs 400 to Rs 42,600 per kg on poor offtake by industrial units and coin makers.
Traders said the precious metals remained in demand for the ongoing festivals and marriage season, while silver rose on industrial units and coin makers demand.
Indian markets may see some weakness in stocks post Fed hike.
Silver ready rose by Rs 350 to Rs 33,850 per kg.
Gold in New York, which normally set price trend on the domestic front, rose by 0.2 per cent to $1,186.20 an ounce and silver by 1.1 per cent to $15.76 an ounce in Thursday's trade.
The RBI on Wednesday eased gold import norms by allowing select trading houses, in addition to already permitted banks, to procure the precious metal to boost exports.
The government on Friday raised the import tariff value of gold to $461 per ten grams and of silver to $803 per kg as prices of the precious metals touched all-time high this week.
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Traders said reduced offtake by retailers and jewellery fabricators at existing higher levels mainly kept pressure on the prices of both the precious metals.
Gold plunged sharply to hit a three-month low.
Gold imports surged by nearly four-fold to $4.17 billion in October to meet the festival season demand.
Traders said brisk buying by stockists for the ongoing wedding season mainly led an upsurge in precious metal prices.
Sentiments remained subdued largely in tandem with a weak trend in global markets where gold traded at a four-year low as surging dollar waned demand for the precious metals, traders said.
Gold surged by Rs 325 to trade at over three-month high of Rs 27,890 per 10 grams at the bullion market on Thursday.
Gold regained its sheen on Wednesday by soaring Rs 315 to Rs 27,565 per 10 grams at the bullion market.
Silver also rebounded by Rs 530 to Rs 43,930 per kg on increased offtake by industrial units and coin makers. It had lost Rs 100 on Wednesday.
Traders said lack of buying support from retailers and jewellers who preferred to keep their activity restricted, anticipating further fall in coming days, mainly kept gold prices unchanged.
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.
Traders said sentiment bolstered after gold jumped to a one-month high in overseas markets as expectations the US Federal Reserve will sustain stimulus hurt the dollar, and raised demand for precious metals as an alternate investment.
While gold surged by Rs 275 to Rs 27,300 per 10 grams, silver gained Rs 295 to Rs 40,730 per kg on increased offtake by jewellers and industrial units.
Traders said appreciating rupee against the American currency made imports of dollar denominated precious metal cheaper, which mainly kept pressure on bullion prices.
Traders said emergence of buying at prevailing lower levels by jewellers and retailers mainly supported the upside in prices of precious metals.
Traders said fall in demand from jewellers and retailers due to end of festive season and a weak global trend where gold retreated from a six-week high as investors expected the Federal Reserve to end its bond-buying programme this week, eroding safe-haven demand, mainly pulled down precious metal prices here.
Traders said sustained selling by stockists against sluggish demand and weakening global trend mainly kept pressure on precious metals.
Globally, gold prices slipped by 0.26 per cent to $1,246.20 an ounce in early trade in London.
This will encourage exports and discourage non-essential imports such as precious metals
Gold continued its rising streak for the third day and rose by Rs 20 to Rs 27,860 per ten grams in New Delhi on Friday on festive season demand from jewellers and retailers amid a firming global trend.
Marketmen said increased buying by jewellers and retailers to meet the festive season demand amidst a firming global trend mainly kept precious metals higher.
Gold prices rose by Rs 190 to Rs 27,190 per 10 grams at the bullion market on Friday.
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