Govt said price of petrol had come down from what they were in 2013.
Analysts said apart from profit-booking by speculators at prevailing level, a weak trend in global market mainly led to the fall in gold prices at futures trade.
China's 2016 oil demand grew at the slowest pace in at least three years, Reuters calculations based on official data showed.
On similar lines, the metal for delivery in far-month March traded higher by Rs 5.50, or 0.79 per cent, to Rs 701 per kg in 19 lots.
In the international market, silver gained 0.29 per cent to USD 17.54 an ounce in Singapore today.
Globally, gold rose 0.25 per cent to USD 1,222.50 an ounce in Singapore.
Asia benchmark rubber futures at the Tokyo Commodity Exchange (TOCOM) hit their highest levels in more than five years last week
Tensions between Tehran and Washington have risen since a recent Iranian ballistic missile test which prompted U.S. President Donald Trump's administration to impose sanctions.
In value terms, jewellery demand saw a drop of 12.3 per cent in 2016 at Rs 1,38,837.8 crore, from Rs 1,58,310.4 crore in 2015
Jewellery demand, meanwhile, sank over the year on the back of higher gold prices.
US crude oil inventories rose last week by an unexpected 6.5 million barrels to 494.76 million barrels, the Energy Information Administration said on Wednesday.
The metal for delivery in February shed Rs 63, or 0.22 per cent, to Rs 28,879 per 10 grams in 28 lots.