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Gold hit a four-month high on Wednesday following statements from the US Treasury secretary that a weaker dollar is ‘good for trade.’
Gold rose to $1,348.67 a troy ounce in morning trading, its highest level since September.
“Gold is in thrall to the dollar, full stop,” David Govett, head of precious metals at brokerage Marex Spectron, said.
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Gold has rallied 9 per cent since mid-December on the back of a weaker dollar, which makes gold more attractive for overseas buyers.
The trade-weighted dollar index fell to its lowest level in over three years on Wednesday following statements by US Treasury secretary Steven Mnuchin at Davos that a weaker dollar is good for US trade in the short term.
Other precious metals have also benefited from dollar weakness this year. Platinum, a metal used in jewellery and catalytic converters for diesel cars, is up 9 per cent year-to-date to trade at $1,011.83 a troy ounce.
Silver, however, has been left behind, due to concerns about the impact of President Donald Trump’s decision to put tariffs on imports of solar cells.
Silver paste is a key ingredient in solar photovoltaic cells.
