Gold shoots up while Bitcoin plunges as President Donald Trump tests positive for COVID-19

The world has woken up to the news that the United States President, Donald Trump, has tested positive COVID-19. The virus sweeping across the globe has affected the US the most. Trump has also been criticized for not taking the pandemic seriously, endangering many people's lives in his country.

Tonight, @FLOTUS and I tested positive for COVID-19. We will begin our quarantine and recovery process immediately. We will get through this TOGETHER!

— Donald J. Trump (@realDonaldTrump) October 2, 2020

According to worldometer, more than 34 million coronavirus cases have been reported globally. Over a million lives have been lost to the disease, whose end remains unknown. The United States leads with the number of cases reported by the country at 7.5 million. It also has the highest number of reported deaths at nearly 213,000. In the last 24 hours only, the US reported more than 800 deaths.

Gold soars as Bitcoin tumbles

As reported earlier, Bitcoin bears continue on the rampage that started on Thursday after news broke that the US Commodities Futures Trading Commission (CFTC) had charged BitMEX for violating the Banking Secrecy Act and selling unregistered derivatives to customers in the country. Before the news settled, Trump Tweeted that he had tested positive for COVID-19.

Bitcoin quickly embarked on another selloff, revisiting support at $10,400. Although trading at $10,500, the flagship cryptocurrency is yet to find formidable support. Moreover, the selling pressure appears to be absorbing most of the buying pressure from investors who are currently 'buying the dip.'

BTC/USD 4-hour chart

While Bitcoin, like gold, has been popularized as a safe-haven asset for hedging against the traditional markets in times of uncertainty, it failed to rise to the occasion. However, the precious metal seems to be taking up the role with stature as it soars amid news that Trump is infected with the coronavirus.

From time immemorial, gold has been used not only as a store of value but for its ability to perform incredibly well as a safe-haven when hedging against more traditional markets like stocks. At the time of writing, XAU/USD is teetering at $1,907 per ounce amid a gradually building upward momentum.

XAU/USD daily chart

If gold can break above the descending trendline, all the attention will shift to the 50-day Moving Average (SMA), currently at $1,947 per ounce. The rest of the journey to $2,000 per ounce will depend on the precious metals' ability to hold the 50 SMA, thereby validating its safe-haven status even more.

The stock market reacted negatively to Trump's COVID news. For instance, Japan's Nikkei erased the previous gains, closing at 0.6%. Similarly, S&P Futures is down 1.14% on the day, while Dow Futures are trading lower by 1.13%.

According to Naeem Aslam, Avatrade's chief market analyst, "the biggest question for investors and traders is how this situation is going to impact the Trump's presidential campaign?" Joe Biden's chances of winning could be increasing, but how will his win affect the market? It is essential to keep in mind that Trump values the stock market.