Gold falls as dollar rises

BENGALURU, Apr 25 (Reuters): Gold fell on Wednesday as the dollar and US Treasury yields jumped on robust US data and signs of an easing in the US-China trade conflict.

U.S Treasury yields rose to 3 per cent for the first time in more than four years, reflecting the durability of the US economic expansion after US consumer confidence rebounded in April and new home sales increased more than expected in March.

But higher yields on bonds make gold a less attractive investment because it pays no interest.

Meanwhile, there was a decline in political risk after the United States said it would likely reach a trade agreement with China and that officials from both sides would sit down for negotiations in a few days.

"Recently there has been some optimism that the U.S-China trade war isn't going to be as big of an issue," said Natixis precious metals analyst Bernard Dahdah.

"There is a bit more confidence in the US and that negatively affects gold, naturally, in terms of geopolitics."

Spot gold was down 0.4 per cent at $1,325.06 per ounce, as of 0945 GMT, erasing the gains made in the previous session when it broke a three-session losing streak.

US gold futures dropped 0.5 per cent to $1,326.50 per ounce.