Gold price in China drops below London for the first time in 2013

The price of London settled gold bounced to $1,348 per ounce Tuesday morning, halving an earlier 0.9% drop after China's most active gold contract closed below that world benchmark for the first time in 2013. Overnight trade was "very dull" according to one dealing desk.

The gold price then dropped $12 per ounce in 10 minutes striking a low of $1341 – some 1.5% underneath Monday's new five week high. The Reserve Bank of India earlier increased its key interest rate for the second month running. Shanghai's most actively traded gold contract closed the day equal to $1,350.15 per ounce below the international spot market's then price for London settlement of $1,353.70. Prices on the Shanghai Gold Exchange were standing at a $7 premium to London settlement last week, achieving $30 above that international benchmark. Meanwhile in China, interbank loan rates eased slightly.