Oil slides, gold climbs after US President Trump announces COVID-19 infection

Oil and copper slumped while gold rose after President Donald Trump announced that he and First Lady Melania Trump had tested positive for Covid-19 with barely one month left until the US presidential election.

Brent crude dropped as much as 3.7 percent while copper lost as much as 1.9 percent after Trump tweeted that he and the first lady would “begin our quarantine process, shortly after one of his closest aides, Hope Hicks, had fallen ill with the coronavirus. Gold erased an earlier loss to climb 0.4 percent.

“The market will be trading nervous today, said Ole Hansen, head of commodity strategy at Saxo Bank A/S. “The immediate result was a flight to safety with the dollar, gold and bonds all receiving a bid while stocks, oil and copper sold off.

Brent crude oil extended losses to slump 3 percent to $39.71 a barrel on the ICE Futures Europe exchange at 7:28 a.m. in London, while West Texas Intermediate for November delivery fell 3 percent to $37.56 a barrel on the New York Mercantile Exchange. Copper dropped 1.3 percent to $6,305 a ton on the London Metal Exchange.

Spot gold traded 0.4 percent higher at $1,913.90 an ounce, after earlier losing as much as 0.8 percent. The Bloomberg Dollar Spot Index rose 0.2 percent. Silver for immediate delivery jumped 0.9 percent to $23.9992 an ounce, recovering from a 1.3 percent loss.

In a memo, Trump’s physician said that the president and first lady plan to remain at the White House “during their convalescence and that the medical unit would “maintain a vigilant watch.

Bullion has rallied to a record this year as vast amounts of stimulus were pumped into economies to curb the damage from the coronavirus pandemic. While prices stumbled last month amid a stronger dollar, the precious metal is still supported by low interest rates, a resurgence in COVID cases in some parts of the world, and the heightened uncertainty heading into the US elections.

Investors are also awaiting the monthly nonfarm payrolls data due later Friday. Bloomberg Economics analysts do not expect the September report — the last national tally released before Americans head to the polls — to be consequential enough to tilt the election outcome.

“Trump and the coronavirus news, along with the setback to the talks on the US stimulus package, are just triggers and they’re serving as a reminder that the global economy is in trouble at least for the next six months, said Vandana Hari, founder of Vanda Insights in Singapore.