The retail price of gold and platinum jewelry in Shanghai will be cut from today, the first drop following eight consecutive increases since beginning of the year.

The base retail price of gold will be cut to 196 yuan a gram (US$25.62) from 202 yuan and high purity platinum jewelry in the city will also be reduced to 389 yuan a gram from 399 yuan, the Shanghai Gold & Jewelry Trade Association, which sets base prices for gold and platinum, announced today.

Gold prices at big-name jewelers may still sit at 202 yuan a gram and platinum at 400 yuan a gram as the association allows a three percent fluctuation.

Average gold prices are expected to settle around US$652.38 an ounce this year, according to a forecast from 29 analysts participating in a London research report. The prices are expected to fluctuate from US$500 to US$850 an ounce this year.

China is the world's third-biggest gold consumer, as people consider the precious metal a safe haven against inflation and a symbol of fortune.