Dubai gold prices slip from a seven-week high

Dubai - Precious metal prices ease due to rebound in US Treasury yields.

Gold prices eased on Tuesday morning after hitting a seven-week high on Monday, weighed down by rebound in US Treasury yields.

Spot gold was slightly down $5.67 an ounce or 0.32 per cent at $1,770 per ounce by 9.30am UAE time, after hitting $1,789.77 on Monday, its highest since February 25.

In Dubai, 24K gold was trading at Dh214.75 per gram in retail on Tuesday morning, down from Dh215.25 on the previous day.

Similarly, 22K, 21K and 18K fell to Dh201.75, Dh192.5 and Dh165.0 per gram, respectively.

"Gold came off Monday's high against a backdrop of rising yields. But the rise in yields didn't echo into the dollar. The greenback's soggy performance is supportive for gold," said Ilya Spivak, currency strategist, DailyFX.

The benchmark 10-year US Treasury yields rose above 1.6 per cent after hitting a five-week low last week, increasing the opportunity cost of holding non-yielding bullion.

Spot gold is likely to slide more and trade in the range of $1,744 to $1,758 per ounce.

Gold is seen as a hedge against inflation that could follow stimulus measures, but higher US Treasury yields have dulled some of the appeal of the non-yielding commodity this year.

"As it comes to inflation, the more inflation we get and the less the US Federal Reserve is able to ignore that, the worse for gold it is... Technically, gold's trend is still pointing lower," Spivak said.

Although the US central bank has reiterated its stance to keep monetary policy accommodative for some time, Fed officials have said any spike in inflation is likely to be temporary.

waheedabbas@khaleejtimes.com

• Dubai