Gold, Bitcoin surge after Biden drops out of race

Political turmoil in the US has pushed up gold prices, while Bitcoin has benefited as Donald Trump is seen as having a higher chance of winning the election.

At the opening of the trading session on July 22, world spot gold increased by 6 USD, to 2,406 USD per ounce. The precious metal increased in price due to investors' demand for shelter when the uncertainty in the US election increased.

US President Joe Biden announced on July 21 that he was ending his presidential bid "in the best interests of the country". He also supported Vice President Kamala Harris as the Democratic candidate.

Bitcoin price hit a one-month high this morning. Chart: CoinDesk

Bitcoin's price also briefly approached $68,500 per coin on the morning of July 22. This is the highest level in a month. "This development reflects investors' view that Ms. Harris cannot defeat Mr. Donald Trump in the race for the White House. Bitcoin's prospects are bright because Trump has a friendly stance towards cryptocurrencies," explained Tony Sycamore, a market analyst at IG Australia.

Last week, the world’s largest cryptocurrency also hit a two-week high after Trump’s attempted assassination, with investors still believing the incident would boost his chances of winning the election.

Meanwhile, the Dollar Index - a measure of the greenback's strength against a basket of major currencies - was almost unchanged this morning. The index fell 0.04% compared to last week's end. Compared to the yen, the USD fell 0.08% to 157.3 yen per US dollar. The Euro also rose 0.1% to 1.08 USD per EUR.

Still, Joseph Capurso, a strategist at Commonwealth Bank of Australia, said it was too early to gauge the dollar’s ​​reaction. “The key will be the polls that come out this week,” he said. If Trump has a better chance of winning, the dollar will strengthen, and vice versa.

U.S. government bond yields also rose, as investors bet that Trump's economic policies would accelerate inflation and the nation's debt. The former president's pledges to raise import tariffs could push up prices. Meanwhile, his stance on immigration restrictions would tighten the U.S. labor market, putting further pressure on wages. U.S. stock market futures also rose. The S&P 500, DJIA and Nasdaq 100 futures all rose 0.1% this morning.

In Asia, stock indexes in major markets are currently down. Nikkei 225 (Japan) is down 0.97%. Kospi (South Korea) is down 1.4%. Shanghai Composite (China) is down 0.9% and Hang Seng (Hong Kong) is down 0.3%.

This week, the world will receive other information that can affect the market. That is the financial reports of the second quarter of large companies, such as Tesla, Alphabet and General Electric. The personal consumption expenditures price index - the US Federal Reserve's preferred inflation measure - is also released.

This morning, the People's Bank of China (PBOC) cut a series of short-term and long-term reference interest rates by 10 basis points (0.1%), in order to stimulate growth. The yuan price was almost unchanged after this news.

Ha Thu (according to Bloomberg, Reuters)

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