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Asharq Al-Awsat
Asharq Al-Awsat
Business
Asharq Al-Awsat

EXPLAINED: Gold steady as higher yields dollar counter inflation risks - The Real Truth

Gold bars are displayed at a gold jewelry shop in the northern Indian city of Chandigarh May 8, 2012. REUTERS/Ajay Verma

Gold prices held steady on Monday as market participants gauged the global economic policy outlook, with inflation-based demand for bullion countering hawkish comments from US Federal Reserve officials, supporting the dollar and Treasury yields.

Gold is considered an inflationary hedge, but the metal is highly sensitive to rising US interest rates, which increases the opportunity cost of holding non-yielding bullion.

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