BeInNews Academy Ltd © Street: Suite 1701 – 02A, 17/F, 625 King’s Road, North Point. Hong Kong.
Futures for safe-haven assets spiked before the weekend closing and traders considered a host of factors. Gold,, and precious metals all saw substantial increases, driven by fear.
International news turned ugly, with increasing concern about the widespread coronavirus in Wuhan, China. Two cases have already been reported in the US, causing increased tension and evacuations from China.
In Europe, US President Donald Trump stirred the pot with international trade relations. Threats to increase tariffs on UK and EU products stirred anxiety about future relations. And the complete evacuation of the Russian government, led by Medvedev, has left many wondering what’s next.
All this unrest and confusion has led to a desire for ‘safe haven’ assets among traders. Such assets are noteworthy because they provide protection from the more economically dependent equities market.
Gold futures, in particular, have spiked, as investors added nearly 10.5K contracts to current open interest positions on Friday, reversing two previous drops. Trading volume was also up. The data was made available through the Chicago Mercantile Exchange (CME).
CME also reported increases in Bitcoin Futures contracts are literally agreements to buy or sell an asset on a future date and for a fixed price.... More as traders bet on the digital currency. Bitcoin is seen by many as a safe haven asset, and the approaching halving adds to the potential for upside.
These futures increases come concurrently with a decline in the US equities market of more than 1% Friday. As the negative news floods into the market, the overall sentiment has been one of concern. Safe-haven assets such as Bitcoin tend to increase during times of fear.
As the market continues to unfold, news surrounding the political and social events will certainly make waves. Should the coronavirus outbreak continue, US-China economic ties will be strained. Already, US companies are moving employees out of the region, and the Chinese government has declared a state of emergency.
Bitcoin and its distance from international relations and trade protects it from these types of events. No wonder, then, that it is often referred to as ‘digital gold,’ and will often follow the gold futures market.
Do you need trading guidance during this Coronavirus outbreak? BeInCrypto is here to help! Join our Telegram Trading Community for Market Updates, exclusive Trading Signals and a FREE Trading Course! Images courtesy of Shutterstock, Trading View and Twitter.