Calcutta, Nov. 1: The rising rupee has taken some of the shine off domestic gold prices.

While the price of the yellow metal today flared up to $800 per troy ounce (one troy ounce = 31.10345 gm) in Asia and local rates touched Rs 10,250 per 10 gm, gold investors here are not exactly rejoicing.

This is because the price should have been above Rs 11,400 had there been no appreciation in the exchange rate of rupee against the dollar.

The yellow metal had breached the Rs 10,000-mark on May 5 last year. Gold then was trading at $725 per troy ounce in the international market. Crude oil price was $72 a barrel.

Seventeen months later, the gold price again climbed to Rs 10,040 per 10 gm in the domestic market on October 28. Since then it had been trading above Rs 10,000.

Though the price of gold had gone up in dollar terms, it remained at the same level in rupee terms (on a point-to- point basis) because of the rupee appreciation.

On May 5 last year, the exchange rate of rupee was 44.85 a dollar. Today it is 39.32 a dollar — an increase of over 14 per cent. The price of crude during the last 17 months rose 33.33 per cent in dollar terms.

In other words, the rupee had lost 15.79 per cent in value against gold between May 2006 and now.

The gold price in the domestic market has been rising because of the increasing demand from stockists before Diwali. However, the demand for jewellery before the festival season has been lacklustre this year.

According to market observers, scrap gold sales during the last six months surged 30 per cent on replacement demand for jewellery.

The price (per kg) of silver, another precious metal, touched Rs 19,000 today.