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Donald Trump's Strong Dollar Comments Push Gold Prices To Session Lows

Kitco News

(Kitco News) - Gold prices have fallen to session lows as President Donald Trump showed his support for a strong U.S. dollar.

In an interview with CNBC at the World Economic Forum in Davos Switzerland, Trump said that he wants to see a stronger U.S. dollar, adding that Wednesday’s comments from Treasury Secretary Steven Mnuchin were taken out of context.

“The dollar is going to get stronger and stronger, and ultimately I want to see a strong dollar," Trump said in the interview. "Our country is becoming so economically strong again and strong in other ways, too."

Trump’s comments helped to reverse a sharp selloff in the U.S. dollar, which fell to a more than three-year low against a basket of global 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 88.43 points.

New momentum in the U.S. dollar has driven gold prices to session lows. February gold futures last traded at $1,344.50 an ounce, down 0.88% 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 created massive 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 politicians took the comments as the first shot in a global currency war.

Earlier Thursday, European Central Bank President Mario Draghi had some harsh comments for the Treasury Secretary.

Draghi said that Mnuchin’s comments don’t just have implications in forex-exchange markets but questions “the status of international relations.”

Draghi added that Europe would not participate in a currency war.

“We will not target our exchange rate for accommodative purposes,” he said during the question-and-answer portion of his press conference.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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