LONDON: Gold fell on Tuesday as the dollar advanced after US Federal Reserve Chair Janet Yellen said the central bank will likely need to raise interest rates at an upcoming meeting with the economy expanding further.

The Federal Reserve chair struck a more hawkish tone than investors had expected, although she did flag considerable uncertainty over economic policy under the new Trump administration.

US President Donald Trump`s national security adviser Michael Flynn resigned on Tuesday over revelations that he had discussed US sanctions against Moscow with the Russian ambassador before Trump took of fice.

Spot gold fell 0.2 per cent to $1,222.60 an ounce by 1545 GMT, while US gold futures dropped 0.2pc to $1,223.80. The dollar index reached a three-week peak following Yellen`s prepared remarks before the Senate Banking Committee.

On the upside for gold, holdings of SPDR Gold Trust, the world`s largest gold-backed exchangetraded fund rose 0.49pc to 840.87 tonnes on Monday.-Reuters