Spot gold was little changed at USD 1,137.45 an ounce by 0037 GMT. The metal had gained 2.2 percent on Friday, its biggest one-day rise since January 15.
At the Multi Commodity Exchange, gold for delivery in October was up by Rs 35, or 0.13 per cent, to Rs 26,502 per 10 gram in a business turnover of 15 lots.
The metal's slide follows a rally last week that took it to a near three-week high after the Fed's move to stand pat on interest rates. However, the US central bank has also said it would move to increase rates later this year for the first time in nearly a decade.
The GBS and GMS aim to curb investment demand for gold and also mobilise idle gold lying with households.
At Multi Commodity Exchange, gold for delivery in October rose by Rs 250, or 0.96 percent, to Rs 26,418 per 10 grams in a business turnover of 1,422 lots.
Spot gold was flat at USD 1,130.70 an ounce at 0036 GMT, not far from a two-week high of USD 1,133.20 reached in the previous session. The metal is headed for a 2-percent weekly gain, following three weeks of losses.
Spot gold eased 0.1 percent to USD 1,103.95 an ounce by 0037 GMT. The metal has not made any significant move this week, after dropping to a one-month low of USD 1,098.35 last week.
Spot gold fell 0.3 percent to USD 1,103.68 an ounce by 1148 GMT. It had fallen to USD 1,098.35 on Friday, the lowest since August 11.
Spot gold had dropped 0.2 percent to USD 1,105.40 an ounce by 0024 GMT, after losing 0.3 percent on Friday. The metal had fallen to USD 1,098.35 in the previous session, its lowest since August 11.
However, silver eased Rs 325 to Rs 35,250 per kg due to reduced offtake by industrial units and coin makers. Bullion traders said emergence of buying by jewellers and retailers at the existing levels to meet wedding season demand mainly led to recovery in gold prices.
On the other hand, silver declined owing to lack demand from industrial users. Standard gold (99.5 purity) firmed up by Rs 70 to end at Rs 26,395 per 10 grams from Friday's closing level of Rs 26,325.
Spot gold had eased 0.1 percent to USD 1,132.30 an ounce by 0318 GMT, after dropping 0.5 percent on Wednesday. US gold slipped about USD 1 to USD 1,132.40.
Sustained losses in Asian equities could switch some funds to gold after data showed US factory activity hit a more than two-year low in August, coming on the heels of a survey showing China's manufacturing sector shrank at its fastest pace in three years last month.
Fed Vice Chairman Stanley Fischer said on Saturday that US inflation will likely rebound as pressure from the dollar fades, allowing the US central bank to raise interest rates gradually.
Silver rallied further on the back of heavy offtake by industrial units and speculative traders. Standard gold (99.5 purity) jumped by Rs 235 to finish at Rs 26,505 per 10 grams from Friday's closing level of Rs 26,270.