As gold prices drop,demand increases

Gold prices dipped and retail consumers have started their festival and marriage shopping for the precious metal months in advance.

The gold prices on Tuesday dipped as low as Rs. 11,000 per 10gram , down nearly one in nearly a month ago on July 15.

Gold prices plunged by Rs. 945 to Rs.11,000 per 10 gram in early trade on Tuesday on heavy selling by stockists sparked by weak global ones. The market witnessed an all-round selling immediately after the opening and gold tumbled to its weakest in almost eight months in volatile trade, losing its safe haven upped as investors shifted some of their money back into the US dollar and oil further retreated from record higher.

Globally, gold hit an intra-day high of $825.85 before falling to 801.90 US dollar an ounce, its lowest level since late December last year as the euro struck a six-month low against the dollar. The metal traded out $863.50 an ounce in New York, at the time Indian bullion markets were closed for the day.