US President Donald Trump’s announcement of his COVID-19 infection has had major impacts on global financial markets, including oil, gold and stocks.
On Friday, Trump said in a tweet on Twitter that he and first lady Melania Trump had tested positive for the new Corona virus, and that they would be quarantined, only weeks before the presidential elections scheduled for November 3.
Trump had said earlier that he started a quarantine after Hope Hicks – a senior adviser to the president – was infected with the virus.
US stocks are falling
After the official announcement that Trump and his wife were infected and entered quarantine, US stock prices fell in the futures markets on Friday.
The Dow Jones index fell 1.71%, while the broader Standard & Poor’s 500 index fell by 1.62%, and the dollar index rose after Trump’s injury was announced by 0.06%, or 0.061 points, to 93.823, according to the US Federal Reserve data.
European shares are falling
European stocks also fell on Friday, affected by the news of Trump’s injury, which negatively affected stock markets around the world.
The pan-European STOXX 600 index fell 1% by 07:04 GMT, the German DAX index and the French CAC 40 index fell 1.3%, while the British FTSE 100 index fell 1%.
The shares of chemicals, mining, and oil and gas were at the forefront of the declining sectors in early trading, and fell between 1.3% and 1.5%.
The oil is running low
Oil prices were also affected after Trump’s announcement, as they continued their losses, which increased to 3% on Friday, in light of existing concerns about demand.
Brent crude fell 1.47 cents, or 3.6%, to $ 39.4 a barrel by 06:15 GMT, and US crude fell $ 1.40, or 3.6%, to $ 37.32.
US crude is heading towards a decline of about 6% this week, while Brent is on the path of declining by more than 7%, in a decline for the second consecutive week for the two benchmarks.
“Oil remains the weakest link in the news of Covid-19 (referring to the infection of the American president), as it reinforces the opinion that anyone – even the leader or the president – is exposed to the virus,” said Stephen Ince, head of global market strategies at Axi.
He said the news makes it more likely that Democratic candidate Joe Biden will win the presidential election, which is due in just over a month.
A Reuters survey showed that crude supplies from the Organization of the Petroleum Exporting Countries (OPEC) rose in September by 160,000 barrels per day, compared with a month ago.
The increase is mainly a result of high supplies from Libya and Iran, as the two OPEC countries are exempt from an agreement to curb production between OPEC and allies led by Russia, in what is known as the “OPEC +” group.
Gold continues to gain
On the other hand, gold continued its gains today, Friday, on the path to achieving its best weekly performance in nearly two months, as investors bought safe haven assets.
Gold rose in spot transactions 0.5% to 1915.34 dollars an ounce by 06:45 GMT, to erase losses it incurred in early transactions in Asia. US gold futures rose 0.3% to $ 1922.20.
The yellow metal gained 2.9% since the start of the week, and is on track to achieve its largest percentage increase since the week ending August 7.
“Trump’s diagnosis of Covid-19 has caused a significant immediate rise in gold prices, as investors flock to (safe) haven positions,” said Jeffrey Haley, chief market analyst at Oanda.
He added, “I think that risk aversion will remain high … based on how the situation develops at the end of the week, especially if more senior US government leaders are confirmed to be infected with the virus, and gold may prepare for an extended wave of rise.”
Futures contracts for US stocks fell 2% due to the news that Trump and his wife Melania had tested positive for COVID-19, and were quarantined weeks before the elections.
“This news should support gold, because we will probably see a catalyst soon,” said Stephen Ince, head of market strategies at AxiCorp. “People should own gold in this case.”
On Thursday, the US House of Representatives approved a $ 2.2 trillion Democratic Party plan to provide more economic aid to alleviate the repercussions of the Coronavirus pandemic.
Gold tends to benefit from broad stimulus measures, as it is considered a hedge against inflation.
As for the rest of the precious metals, silver gained 0.7% to $ 24.07 an ounce, and it rose more than 5% since the beginning of the week, platinum fell 0.2% to $ 894.82, and palladium fell 0.1% to $ 2311.95.
Huge impact on the markets
For his part, Japanese Economy Minister Yasutoshi Nishimura said – on Friday – that the news of US President Donald Trump’s infection with the Corona virus has a great impact on financial markets.
The minister also added during statements to reporters that he hoped Trump would recover quickly.