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Gold prices retreat from over five-week highs as dollar crawls up

Gold prices dipped on Wednesday, retreating from a more than five-week top hit in the previous session, as the dollar crawled higher.

Spot gold was down 0.2 per cent at $1,235.31 per ounce at 06:48 GMT, after hitting its highest since Oct. 26 at $1,241.86 an ounce in the previous session. U.S. gold futures were down 0.5 per cent at $1,240.7 per ounce.

"Gold is mainly tracking the U.S. dollar," said Brian Lan, managing director at dealer GoldSilver Central in Singapore.

"Today's move in gold prices is a correction because yesterday prices were up quite a bit."

The dollar index, which measures the greenback against a basket of six major currencies, edged up about 0.1 per cent, even though the U.S. currency was under pressure as declining Treasury yields raised concerns over economic growth. [USD/]

The benchmark 10-year Treasury yield fell to its lowest point since mid-September. The spread between the 10-year yield over its two-year counterpart also shrank to the smallest since the start of the financial crisis in January 2008, signalling to some investors an approaching economic slowdown.

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Meanwhile, palladium retreated 0.5 per cent to $1,226.49 per ounce, trading in close proximity to the yellow metal and after notching its record high hit on Tuesday.

Spot silver fell 0.4 per cent to $14.46 per ounce, while platinum was 1.8 per cent lower at $788.90 per ounce after hitting its lowest level since Sept. 17 at $787.5 earlier in the session.

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