By Barani Krishnan
Investing.com - Gold’s standing as a safe-haven became more questionable on Friday as its prices dipped despite President Donald Trump testing positive for the coronavirus. The dollar, the yellow metal’s nemesis, gained instead, once again highlighting the bizarre relationship between the two in recent months.
U.S. gold for December delivery settled at $1,907.60 an ounce on New York’s Comex, down $8.70, or nearly 0.5%, on the day. It fell as much as $21 earlier in the session, hitting a session low of $1,895.20.
For the week though, the benchmark gold futures contract rose 2.2%, accounting for gains made earlier in the week.
Spot gold, which reflects real-time trades in bullion, was down $4, or 0.2%, at $1,902 by 4:04 PM ET (20:04 GMT), after a session low at $1,889.93.
Trump announced via Twitter on Thursday night that he and First Lady Melania Trump had tested positive for the COVID-19, hours after he tweeted that Hope Hicks, one of his closest aides at the White House, had been infected as well.
Yet, gold, the perceived safe haven for both financial and economic troubles, fell sharply after the news about Trump broke, before its partial recovery later in the day.
The Dollar Index, which pits the greenback against six major currencies, was up 0.2% at 93.918 late on Friday. The dollar has gone from strength-to-strength since early August — despite a gaping U.S. fiscal deficit from coronavirus-related spending, a record recession, historic unemployment and other economic ills brought on by the pandemic.
The logic-smashing rally in the DX, as the index is also known, has been one of the main reasons for gold’s inability to recapture the $2,000 highs it fell from in August.
Another reason for gold’s anemic performance has been the lack of new U.S. economic stimulus for COVID-19, with the first, passed by Congress in March, having run out of its approved $3 trillion.
Republicans aligned with Trump and their Democrat rivals in Congress have been unable to agree on how large the next stimulus should be, with the White House suggesting for a package of just around $1.5 trillion against the $2.2 trillion proposed by Democrats.