Gold crashed on Wednesday, April 25, as the dollar and U.S. Treasury yields jumped on robust U.S. data and
signs of an easing in the U.S.-China trade conflict.
U.S Treasury yields rose to 3 percent for the first time more than four years, reflecting the durability of the U.S. economic expansion after U.S. 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 inegotiations 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 U.S. and that negatively affects gold, naturally, in terms of geopolitics.”
Spot gold was down 0.4 percent 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.
U.S. gold futures dropped 0.5 percent to $1,326.50 per ounce. In other precious metals, spot silver dropped 0.7 percent to $16.58 an ounce, and platinum eased 0.3 percent to $923.30 an ounce.
Palladium fell for a third straight session, down 0.9 percent at $965.70 an ounce.
