  The molecular dynamics study of fragmentation in peripheral $^{197}$Au
+$^{197}$Au collisions at 35 MeV/nucleon is presented to probe the nuclear
matter compressibility in low density regime. The yields of different fragment
species, rapidity spectra, and multiplicities of charged particles with charge
$3\leq Z \leq 80$ are analyzed at different peripheral geometries employing a
soft and a hard equations of state. Fragment productions is found to be quite
insensitive towards the choice of nucleon-nucleon cross sections allowing us to
constrain nuclear matter compressibility. Comparison of calculated charged
particle multiplicities with the experimental data indicates preference for the
\emph{soft} nature of nuclear matter.
