Gold price fell by Rs 250 to Rs 44,430 per 10 gm on Wednesday, while Silver price trended at Rs 66,500 per kg, according to the Good Returns website.
In New Delhi, the price of 22-carat gold dipped Rs 350 to Rs 43,800 per 10 gm, while in Chennai it fell by Rs 170 to Rs 42,040. In Mumbai, the rate fell to Rs 43,430, according to the website. The price of 24-carat gold in Chennai was Rs 45,860 per 10 gm.
Gold jewellery price varies across India, the second-largest consumer of the metal, due to excise duty, state taxes, and making changes.
Gold surged more than 2% on Tuesday on the back of a retreat in U.S. Treasury yields and a weaker dollar, staging a strong recovery from the nine-month low it hit in the previous session.
Spot gold was up 2% to $1,715.40 per ounce by 11:53 a.m. EST (1653 GMT), having slipped on Monday to $1,676.10, its lowest level since June 5.
U.S. gold futures climbed 2.1% to $1,713.60.
"I don't know if this is the end to the upside trend in yields, but it's a start. Gold and silver traders have been waiting for this and are jumping back into this market, also given how oversold and low it got," said Bob Haberkorn, senior market strategist at RJO Futures.
Benchmark U.S. 10-year Treasury yields backed away from more than a one-year high hit last week, while the dollar fell.
While gold is considered a hedge against a potential spike in inflation from massive economic stimulus measures, rising bond yields have challenged that status.
Gold may extend gains in the near-term, but "fundamentally, the pendulum swings in favour of bears especially when factoring in how global sentiment is improving on vaccine rollouts and COVID-19 cases are falling globally", said Lukman Otunuga, senior research analyst at FXTM.
Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell on Monday to their lowest level since April 2020.
"The ETF flows are contributing to a greater impact on prices on the way down than on the way up. We forecast gold prices to reach $1,750/oz (in 2021), but given gold's recent volatility, this forecast has quite low conviction," Societe Generale said in a note.
Investors are focusing on the Federal Reserve's two-day policy meeting next week. U.S. central bank chief Jerome Powell has said the Fed's current easy monetary policy stance remains appropriate.