Gold prices eased on Wednesday morning, set for a monthly drop, as progress in the US debt ceiling deal and expectations that the Federal Reserve will likely raise interest rates further eroded bullion's safe-haven status.

In the UAE, the 24K opened at Dh237.5 per gram on Wednesday morning while 22K, 21K and 18K were trading at Dh219.75, Dh212.75 and Dh182.5 per gram, respectively.

Spot gold fell 0.2 per cent to $1,955.28 per ounce.

Legislation brokered by US President Joe Biden and House Speaker Kevin McCarthy to lift the $31.4 trillion debt ceiling and achieve new federal spending cuts passed an important hurdle, advancing to the full House of Representatives for debate and an expected vote on passage on Wednesday.

An overnight decline in Treasury yields has allowed gold prices to defend its support confluence zone at the $1,940 level for now, but intermittent bounces since early May have been short-lived, which raises the chances that it could be the same this time round as well, said Yeap Jun Rong, a market analyst at IG.

Gold prices have come off their recent near-record highs reached early in May.

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