BD Forex School-Gold prices retraced gains on Thursday, retreating from five month highs as the dollar recovered from an overnight selloff after U.S. President Donald Trump said the currency was too strong.
Gold for June delivery was at $1,284.75 on the Comex division of the New York Mercantile Exchange by 10.14 ET, after going as high as $1,290.05 overnight, the most since November 9.
The dollar regained ground after weakening in the wake of Trump’s comments on Wednesday.
In an interview in the Wall Street Journal Trump said the U.S. dollar “is getting too strong” and would eventually hurt the economy. Trump also said he would prefer the Federal Reserve keep interest rates low.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.36% to 100.42 after touching a two-week low of 99.94 overnight.
Higher rates typically support the dollar by making the currency more attractive to yield-seeking investors.
A strong dollar usually weighs on gold, as it dampens the metal’s appeal as an alternative asset and makes dollar-priced commodities less attractive to holders of other currencies.
The dollar received a boost after data showing that the number of Americans filing for unemployment benefits unexpectedly fell last week, suggesting that the labor market remains firm.
Separate reports showed that U.S. producer prices fell in March for the first time in seven months, but recorded the largest year-on-year increase in five years, while U.S. consumer sentiment improved in April.
Elsewhere in metals trading, silver was up 0.97% at $18.47 a troy ounce.
Platinum added 0.79% to trade at $975.55 a troy ounce, while copper rose 1.22% to $2.57 a pound.
