MELBOURNE - US President Donald Trump's policies have eroded the dollar, fuelling a gold rush which has pushed prices to a record high above $4 000 an ounce this week, the president and CEO of Canada's Franco-Nevada said on Thursday.

Tariffs, a growing structural deficit in the US trade balance and the break down of trust in US institutions have combined to speed "de-dollarisation," Paul Brink told a business lunch in Melbourne.

De-dollarisation refers to when countries reduce reliance on the dollar as a reserve currency and in financial transactions. A weaker dollar makes gold more affordable for buyers using other currencies.

"You couldn't have written a more perfect script if you wanted to, on how to undermine the US dollar," said Brink, who runs the $41.3-billion dollar company that invests in gold mines in exchange for a share of revenue from production.

Tariffs are shrinking the US's share of international trade and eroding the use of the US currency, while its structural deficit, the worst among the Group of Seven nations, has lost the US its 'AAA' investment ratings, he noted.

"The third thing you need to be the reserve currency is unbreakable trust in the independence of your institutions," he said. "And Mr. Trump has undermined the banks. He is pivotal in that. That I would say is certainly what is driving this leg of the of the gold cycle," he said.

Gold surged past $4 000 per troy ounce for the first time on Wednesday and is up 54% year-to-date.

Longer term, a more enduring rally in gold prices would come from how central banks think about monetary policy and how central banks think about their own reserves, he said.

Central banks have come to realize that their populations do not want to tolerate austerity, so the way out of an economic downturn must be to boost liquidity, which will also lift the relative value of assets like real estate and gold, he said.

If gold prices have appreciated 9% a year over the dollar, the "rational target" is to say that over five years, at the same rate, gold prices will hit $6 000 an ounce and over 10 years they will hit $9 000, he said.

AUSTRALIA GROWTH

Brink said Franco-Nevada has plans to expand its business in Australia and has recently made two hires in the resource-rich state of Western Australia. It and would like to find some junior goldmine developers to back, he said.

“The reason that we are hiring is our plan is to focus more on Australia," he told the event.

Australia is one of the world's largest producers of gold.

The commodity is set to become the country's second most valuable resource export this financial year after prices surged to record highs.