Donald Trump's Strong Dollar Comments Push Gold Prices To Session Lows
(Kitco News)- Gold prices have fallen to session lows as President DonaldTrump showed his support for a strong U.S. dollar.
In an interview with CNBC at the World Economic Forum inDavos Switzerland, Trump said that he wants to see a stronger U.S. dollar,adding that Wednesday’s comments from Treasury Secretary Steven Mnuchin weretaken out of context.
“The dollar is going to get stronger and stronger, andultimately I want to see a strong dollar," Trump said in the interview."Our country is becoming so economically strong again and strong in otherways, too."
Trump’s comments helped to reverse a sharp selloff in theU.S. dollar, which fell to a more than three-year low against a basket ofglobal currencies. The U.S. Dollar Index last traded at 89.31 points,relatively flat on the day; earlier in the session, the index dropped to 88.43points.
New momentum in the U.S. dollar has driven gold prices tosession lows. February gold futures last traded at $1,344.50 an ounce, down0.88% on the day. Earlier in the session gold was trading at a 1.5-year high at$1,365.40 an ounce.
The U.S. President’s comment comes a day after Mnuchin createdmassive volatility in the currency markets after he said that a weaker U.S.dollar has been “good” for the nation’s economy. Many analysts and politicianstook the comments as the first shot in a global currency war.
Earlier Thursday, European Central Bank President MarioDraghi had some harsh comments for the Treasury Secretary.
Draghisaid that Mnuchin’s comments don’t just have implications in forex-exchangemarkets but questions “the status of international relations.”
Draghiadded that Europe would not participate in a currency war.
“Wewill not target our exchange rate for accommodative purposes,” he said duringthe question-and-answer portion of his press conference.
By Neils ChristensenFor Kitco News
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