Gold futures on Friday were tilting slightly lower, even as investors digested reports that President Donald Trump and his wife contracted the COVID-19 disease and would be quarantining in the White House for days.
The unexpected news comes as the race for the U.S. presidency between Trump and former Vice President Joe Biden is heating up. Some strategists speculate that the news forces investors to come to terms with the front-runner status of Democratic challenger Biden, who was already leading in most national polls against Trump.
“Trump and his wife getting COVID is a bigger news for global financial markets,” wrote Chintan Karnani, chief market analyst at Insignia Consultants, in a Friday note. “Trump will not be able to personally campaign for at least two weeks,” he said, referring to Trump’s recommended quarantine with the disease.
“Gold and silver if they rise today and Monday will test new highs in October. I expect gold [exchange-traded fund] demand to see a very sharp rise due to Trump infected with COVID,” the analyst said.
On Friday, December gold was trading $3.90, or 0.2%, lower at $1,912.70 an ounce on Comex, after gaining 1.1% on Thursday to settle at around a two-week peak.
Silver for December delivery, meanwhile, was 20 cents, or 0.8%, lower at $24.05 an ounce, following a 3.2% in the previous session.
For the week, gold is on track for a weekly gain of 2.7%, while silver is headed for weekly gain of over 4%, based on the most active contracts.
Higher trading in precious metals on the week came as the U.S. dollar has receded somewhat after last week’s rally, providing more room for dollar-based assets to rise.
The ICE U.S. Dollar Index has declined 0.9% so far this week but was trading about 0.1% higher early Friday, as gauged by the index which measures the buck’s strength against a half-dozen currencies. A weaker dollar can make asset’s priced in the monetary unit relatively more expensive to overseas buyers.
Beyond politics, investors will be watching for the monthly U.S. employment data for September due at 8:30 a.m. Eastern, which could show whether U.S. employment continued to grow strongly as more businesses recall workers due to the spread of the deadly disease.
The monthly data will give investors their last snapshot of the labor market before Nov. 3 elections because the October report will be released on Nov. 6