Buyers in Coimbatore city flocked to purchase gold on Wednesday, as prices stood at Rs. 26,450 for 10 grams yesterday, and further fell to Rs. 26, 355 rupees today.
Jewellers said that this phenomenon was due to fluctuations in the international market.
"That is due to the fluctuation in the international market, due to some investors turning to oil or share market, so the fluctuation in the Indian market that reflects in the gold rate coming down," said a jeweler Ekambar.
He added that the diamond business had also gone up by 30 percent.
Buyers said that they could now stock up on jewellery they otherwise find expensive.
"Now the gold prices are coming down, we are really happy to buy because instead of one set, I can buy two sets for my family," said a customer Shilpa.
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However, she added that a resale of gold may pose a problem in future.
Gold has now held below a three-week peak, its safe-haven appeal dulled with the dollar near a four-year high and growing signs of strength in the U.S. economy.