Yellow goblin mail is made by using yellow dye on goblin mail. Like all goblin mail, it is too small for players to normally wear as armour.
During the Land of the Goblins quest, one can turn into a goblin using a Transmogrification potion to access the tribal areas of the Goblin Cave. While wearing yellow goblin mail, one can enter the Yurkolgokh goblin tribe's area and pickpocket the Yurkolgokh priest to obtain the Yurkolgokh key required to continue the quest.
Yellow goblin mail cannot be traded, and therefore has no value. It can only occupy space in the inventory or bank. However, the dye and the goblin mail are tradeable.