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Gulf Today Report
Gold dropped on Wednesday as hope for US Treasury yields increasing on further economic stimulus kept non-yielding bullion under pressure.
Spot gold eased 0.2% to $1,734.26 per ounce by 03:20 GMT while US gold futures dipped 0.1% to $1,732.
Kyle Rodda, IG Market analyst said "there's a clear trend for gold to the downside, and as long as fiscal stimulus keeps getting pumped into the US economy and the Federal Reserve remains reticent about doing something to quash yields, gold prices will struggle."
Benchmark US Treasury yields have maintained close to 1.4% levels despite the decline it recorded in the previous week.
Although gold serves as a shield against inflation, the increase in yields is affecting gold’s status.
Prices can receive a reprieve if "the Fed comes out and says that it'll control yields or we get an outbreak in inflation expectations that implies that it's going to move out of the Fed's control," Rodda said, adding that until then it's "the worst of all worlds for gold."
Analysts say higher yields can force the Fed to tighten monetary conditions sooner than anticipated, which is negative for gold.
Spot gold was steady at $1,772.14 per ounce by 0703 GMT, just $6.92 shy of a near eight-year high of $1,779.06 hit last week. U.S. gold futures rose 0.3% to $1,787.30. Bullion, with quarterly gains of more than 12%.
Spot gold hit its highest since early October 2012 at $1,788.96 in early trade, and by 0958 GMT was at $1,787.31 per ounce, up 0.4%. U.S. gold futures were up 0.3% at $1,805.10 per ounce.
Spot Gold rose 0.2% to $1,945.56 per ounce by 0918 GMT. US Gold futures rose 0.3% to $1,954.20 per ounce.
Brent crude futures fell 20 cents, or 0.3%, to $65.12 a barrel by 05:27 GMT while US West Texas Intermediate (WTI) crude futures were down 21 cents, or 0.3%, at $61.14 a barrel, after losing $1.32 on Wednesday.
Spot gold was up 0.1% at $1,794.67 per ounce by 01:15 GMT while US gold futures rose 0.1% to $1,795.40 per ounce.
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