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Declining on the final day of 2025, the yellow metal for February delivery decreased by Rs 1,098, or 0.8 per cent, to Rs 1,35,568 per 10 grams, on the Multi Commodity Exchange (MCX).
Similarly, silver futures for the March 2026 contract opened sharply lower and tanked by 7.48 per cent, or Rs 18,784, to hit the lower circuit limit of Rs 2,32,228 per kg.
Later, the white metal recovered part of the losses and was trading at Rs 2,37,568 per kg, down by Rs 13,444, or 5.36 per cent.
In the previous session, silver has staged a sharp rebound, ending nearly 12 per cent higher at Rs 2,51,012 per kg, gaining Rs 26,583 on the MCX.
On Monday, the white metal touched a fresh peak of Rs 2,54,174 per kg before retreating sharply amid profit-taking by traders, settling at Rs 2,24,429 per kg.
"Gold and silver declined on the final trading day of 2025 amid profit-taking, and a recovery in the US dollar weighed on prices," Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, said.
On the global front, gold futures for February delivery slipped by USD 45.95, or 1.05 per cent, to USD 4,340.35 per ounce on the Comex.
Silver futures for the March 2026 contract also witnessed heavy selling, sliding USD 6.56, or 8.43 per cent, to USD 71.35 per ounce.
According to Gandhi, the US dollar has strengthened during the session after mixed signals from the Fed's FOMC meeting minutes, which indicated that some officials remain hesitant to support further interest-rate cuts in the near term.
Despite Wednesday's pullback, both metals are on track to close 2025 with their strongest annual gains since 1979, he added.