Metals Weekly Round-Up: Markets React to Trump’s COVID-19 Status
Markets experienced a flurry of activity in the wee hours on Friday after Trump’s Twitter announcement, with the Dow Jones Industrial Average shedding 304 points.
The gold price rallied above US$1,900 per ounce early on Friday (October 2) following news that US President Donald Trump and the First Lady have both tested positive for COVID-19.
Volatility is expected to be muted if the president is asymptomatic, or conversely could ratchet up if his condition deteriorates.
The positive diagnoses pushed safe havens higher, with gold breaking past US$1,900 in the hours after.
“It will now be a wait-and-see game where gold will attract some bids. It’s certainly not a market where I see any appetite for selling gold,” Saxo Bank analyst Ole Hansen told Reuters.
The yellow metal could draw more appetite in the coming weeks if senior cabinet members or other high-ranking officials who work alongside POTUS also test positive.
Watch the full interview with Tucker above.
The author of “Why Gold? Why Now?” sees the asset breaching US$2,500 by the end of the calendar year, motivated by government stimulus, inflation and the devaluation of the US dollar.
“People have a hard time with (US$2,500), it sounds like a big number. But we see all the evidence,” he said. At 11:04 a.m. EDT on Friday, an ounce of gold was priced at US$1,904.53.
Silver moved higher early in the week, hitting US$24.28 per ounce on Tuesday (September 29) ahead of first presidential debate.
Volatility sent the white metal back below US$24 on Wednesday (September 30) and Thursday (October 1), but Tucker sees the white metal breaking the US$40 mark this year, propelled by many of the same catalysts as sister metal gold.
Silver was trading for US$24.05 at 11:12 a.m. EDT on Friday.
For its part, platinum experienced a sharp price fall mid-week. Climbing to US$883 per ounce on Tuesday, recovery pressure forced the metal 2.9 percent lower a day later.
While platinum struggled this session, palladium spent most of the period edging higher. On Monday (September 28), the metal was priced at US$2,153 per ounce, but by Wednesday its weekly high of US$2,251 had been achieved.
At 11:43 a.m. EDT on Friday, platinum was priced at US$874, while palladium was at US$2,207.50.
With markets around the globe reacting the president’s COVID-19 test results, base metals were pushed lower, prompting concerns that a larger decrease may be in store if prices follow the drop in equities.
Copper prices, which began slipping in mid-September, regained some lost ground on Monday and had broken past US$6,600 per tonne by Wednesday. The red metal continued a modest increase on Thursday. Copper was selling for US$6,614 on Friday morning.
Zinc performed a similar mid-week rally, hitting US$2,418 per tonne for its five day high. Unable to sustain its momentum, the metal pulled back, falling sharply to its Monday trading range. Zinc was valued at US$2,365 at 11:53 a.m. EDT on Friday.
Nickel was less volatile for the first week of October, but could face challenges ahead.
“Broad risk-aversion across the LME base metals complex emerged on Thursday afternoon, when US House Representative Nancy Pelosi and Treasury Secretary Steve Mnuchin failed to strike an agreement on a fiscal stimulus package to continue the United States’ fight against Covid-19,” said Metal Bulletin.
This could be further challenged by the US leader’s newly reported COVID-19 status. Nickel was priced at US$14,430 per tonne on Friday.
Lead fell to a four week low on Wednesday, but managed to hang in above US$1,800 per tonne. Lead started the last day of trading for week valued at US$1,809.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
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