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