On April 14, 2020, US President Donald Trump ordered a halt in financial support to the World Health Organisation (WHO), giving the reason of WHO officials failing in the assessment of conducting the Coronavirus Disease 2019 (Covid-19) survey.
On the other hand, the Director General of WHO – Dr Tedros Adhanom Ghebreyesus retaliated to president Trump for politicising the matter after the WHO official has complimented China for their efficient management of the pandemic outbreak.
According to the WHO report, the organisation has declared a global emergency on January 30. Meanwhile, Trump was still mitigating the pandemic spread and reassured Americans that the contagion was under control in the US. When Trump finally ordered a national emergency, that was on March 13 and this action came almost six weeks after the WHO issued the recommendation.
Obviously, Trump is very unhappy now and wants his reputation to be salvaged by putting the blame on someone else. According to the source of WHO, the total contribution received in first quarter of 2020 exceeded more than US$300 million – the US being the largest contributor without doubt.
Data source shows that the US hadcontributed US$115.8 million; China is ranked second with contribution of US$54.7 million; third is Japan at US$41 million; followed by other contributing countries including Germany, UK, France, Italy and Brazil that has put up an aggregate of an estimated US$100 million.
Interestingly, after Trump announced the pull-out of financial aid to WHO, gold prices jumped to US$1,730 per pound – a high not seen since November 2012. We have seen market funds flocking to the yellow metal as a safehaven while cash is moving out of crude oil market.
According to the US State law, the proposal initiated by the president will need the Congress to approve within 45 days, otherwise it will become ineffective of this order. Therefore, we foresee gold prices will continue to trade higher until the end of May with topside target aimed at US$1,800 per pound.
Moving into May, higher gold prices and stronger US dollar will suppress crude oil prices again. With a global supply glut in crude commodity and fund rushing out of it, the natural movement will only lift gold higher as we have expected.
Stock market will become a bubble again when crude oil prices pose a danger in falling again, especially below zero benchmark. Exercise your caution in the month of May.
Dar Wong is a professional in financial industry for more than 30 years of experiences. The opinions are solely at his own. He can reached at [email protected].