NEW YORK (Reuters) - The U.S. dollar extended its recent rout to hit three-year lows and gold rose to its highest level in 1-1/2 years on Wednesday after U.S. Treasury Secretary Steven Mnuchin said he welcomed a weakening in the dollar.

FILE PHOTO: Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., January 23, 2018. REUTERS/Lucas Jackson

Fears of protectionist trade policies by the United States had already pushed the greenback to a three-year low, and Mnuchin’s remark at the annual Davos summit of business and political leaders pushed it down further.

Adding to the protectionist fears, Commerce Secretary Wilbur Ross, also at the Davos summit, said U.S. trade authorities are investigating whether there is a case for taking action over China’s infringements of intellectual property.

U.S. President Donald Trump, who is scheduled to speak in Davos on Thursday, slapped steep tariffs on imported washing machines and solar panels on Monday.

Mnuchin’s comments provided a fresh trigger for dollar selling and raised questions about whether a weaker U.S. currency could provide a long-term impetus for the economy.

The dollar index .DXY, which measures the greenback against a basket of six major currencies, was down 1 percent at 89.198, slipping below 90 for the first time since December 2014. The dollar was down about 1 percent against the yen JPY=.

“It’s quite significant given that this is the first time in a very long time that a Treasury secretary has spoken against a strong dollar,” said Sireen Harajli, FX strategist at Mizuho.

Gold prices rose, hitting their highest level since August 2016, as investors sought insurance against fears of rising inflation. Spot gold XAU= was up 1.4 percent $1,360.23 an ounce.

In U.S. stocks, the S&P 500 ended down slightly as Ross’ comments fueled worries of a trade war. Stocks were higher early in the session following another round of upbeat earnings and the dollar’s fall, which tends to be a positive for U.S. multinationals.

Also weighing on the S&P 500, General Electric Co. GE.N shares were down 2.7 percent. In the latest blow to the largest U.S. industrial conglomerate, U.S. securities regulators are probing a massive insurance charge that GE announced last week. GE on Wednesday forecast more weakness this year at its power business, which produced 60 percent of company profits as recently as 2016.

The Dow Jones Industrial Average .DJI rose 41.31 points, or 0.16 percent, to 26,252.12, the S&P 500 .SPX lost 1.59 points, or 0.06 percent, to 2,837.54, and the Nasdaq Composite .IXIC dropped 45.23 points, or 0.61 percent, to 7,415.06.

The pan-European FTSEurofirst 300 index .FTEU3 lost 0.51 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.15 percent.

U.S. Treasury debt prices slumped, also after Mnuchin’s comments. U.S. 30-year bond yields, which move inversely to prices, rose to their highest level in more than three months.

In late trading, U.S. 10-year Treasury yields US10T=RR rose to 2.652 percent, from 2.622 percent late on Tuesday.

U.S. 30-year bond yields hit a 3-1/2-month peak of 2.956 percent US30YT=RR and were last at 2.933 percent, up from 2.902 percent on Tuesday.

Oil rallied, lifted by a record 10th straight weekly decline in U.S. crude inventories.

U.S. West Texas Intermediate futures CLc1 settled up $1.14, or 1.8 percent, to $65.80. Brent futures LCOc1 gained 57 cents to $70.53 a barrel. Both benchmarks were at their highest levels since December 2014.