Gold futures on MCX were trading lower at Rs 41,860 per 10 grams after opening at Rs 42,000 on Thursday. The decline comes a day after the precious metal surged close to Rs 43,500, mirroring gains in the international prices after US lawmakers announced a $2 trillion stimulus package to curb economic losses from the coronavirus pandemic.
On Thursday, gains were capped by rupee's recovery as Indian stocks traded higher.
Gold prices in India are affected by international rates and rupee's exchange rate.
In the international market, spot gold was trading above $1,600 an ounce as the US Senate passed a historic $2 trillion coronavirus relief package in a unanimous 96-0 vote after days of negotiations.
In India, the 21-day lockdown declared by Prime Minister Modi to curb the spread of coronavirus began on 25 March.
Data around the world for the month of February have been showing clear signs of a slowdown in economic activity and an increase in unemployment amid the government imposed restrictions on movement by most countries to curb the spread of COVID-19. Lives and businesses have been seriously affected by the outbreak.
On Wednesday, Spain's death toll from the pandemic surpassed that of China with over 3,400 fatalities.
So far, Italy has been the hardest hit with at least 7,503 deaths from the outbreak, more than double of the 3,285 deaths reported in China.
In India, the death toll is at 10 after a 65-year-old man was reported to have succumbed to the virus on Thursday morning in Kashmir. At least 606 confirmed cases of infection from the virus has been reported in the country.