Gold prices edged lower during European morning trade on Tuesday, pulling back from the prior session’s two-month peak as the dollar firmed after earlier losses.
Gold for February delivery on the Comex division of the New York Mercantile Exchange dipped $2.00, or around 0.2%, to $1,213.55 a troy ounce by 4:10AM ET (09:10GMT), after rallying $10.70, or 0.9%, a day earlier.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.2% at 100.15, recovering after slumping to a seven-week low of 99.88 earlier.
The dollar sold off after President Donald Trump’s nominee for Treasury Secretary Steven Mnuchin said that an “excessively strong” dollar can have negative short-term impacts on the U.S. economy.
Mnuchin is still awaiting confirmation by the Senate, which has yet to schedule a vote.
Prices of the yellow metal jumped to $1,219.40 on Monday, a level not seen since November 22, as the U.S. dollar tumbled amid uncertainty around the economic policies of new U.S. President Donald Trump.
In his latest executive order, Trump signed to formally withdraw the U.S. from the 12-nation Trans-Pacific Partnership trade deal, distancing America from its Asian allies.
Trump has also vowed to renegotiate the North American Free Trade Agreement (NAFTA) with leaders of Canada and Mexico.
Global financial markets will continue to focus on Trump for further details on his promises of tax reform, infrastructure spending and deregulation, as well as insight regarding policies on China and the domestic economy.