Most of the investors were bound to sell yellow metal to cover up losses incurred in equities.
At 2:15 pm, the December delivery contract for gold seen down by 0.75% at Rs 28,582 per 10 grams, and it touched an intraday low of Rs 28,575 per 10 grams after opening high at Rs 28,720 per 10 grams.
The February delivery contract also lost 0.76% and seen trading at Rs 28,885 per 10 grams.
Domestic equity market also drowned into losses due to grim outlook seen over the US and Euro zone.
While overseas gold prices touched a level of $1,700 back again, over the worsening euro zone debt crisis and slowdown in US economy as investors seek safe haven.
With domestic bullion prices still intact slightly above Rs 29,000 per 10 grams, charm towards the physical buying looks fading away in India.