Silver Futures also dropped and was last trading at Rs 52,800, even as the rupee gained 95 paise against the dollar.
Gold and Silver have been rallying in India largely on the back of the falling rupee. The bullion market is likely to witness volatility ahead of a decision on a military strike on Syria. A decision by the Federal Reserve on QE 3 is also likely to have an impact on gold prices.
A sharp fall in the rupee has lifted gold prices higher in the last two months.
In the international markets, gold rose on Thursday, after falling sharply on Wednesday. The metal was last trading at $1385 an ounce.