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INDIA'S spot market Gold Price set a new all-time record on Tuesday – as the Rupee fell to its lowest level against the US Dollar since March 2009.
The Rupee dropped 1.6% against the Dollar in less than two hours during Tuesday's Asian trading. Although international Dollar Gold Prices also fell in Tuesday's Asian session – at one point dropping sharply from $1775 to $1770 – the net effect sent the Rupee Gold Price higher.
At one point the spot market Gold Price in Rupees hit Rs 29,295 per 10 grams – equivalent to approximately $1790 per ounce at Tuesday's exchange rate.
Some traders report the higher price has dampened gold demand, as India heads into to its annual wedding season, traditionally a time of strong buying.
"Demand is zero, there are no deals in the market," Haresh Acharya, head of the bullion desk at Parker Bullion in Ahmedabad, said on Monday.
"Physical buying is not very encouraging," agreed one dealer in Mumbai.
In China, by contrast, the fall in the Dollar Gold Price appeared on Tuesday to spur some interest in physical gold demand.
On the Shanghai Gold Exchange premiums for physical – the amount paid over and above the spot Gold Price – "recovered another couple of Dollars" following the price fall, according to one Hong Kong bullion dealer.
"There is some physical demand around below current price level in gold, other dealers saw retail flow below $1770 as well."
As Tuesday went on, the spot Gold Price fell to $1761 just before midday in London – before rallying strongly. The London Fix price at 15.04 GMT was $1785 per ounce.
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