Gold Prices In India Ease On Positive Economic Cues

On Thursday, gold futures on MCX (April 2020) were trading 0.28 percent lower at Rs 40,0086 per 10 grams at 11:05 am.

The price of the precious metal in India is tracking international spot prices that have eased on robust economic data from the US, China's statement on tariffs, recovery in equity markets, softer oil prices and strength in the dollar index.

Factors-

• In India, PMI data released on Wednesday showed that India's service sector activity accelerated at the fastest pace in seven years in January.
• The Indian stock markets recovered their Budget Day losses on hopes of economic recovery ahead of the Reserve Bank of India's sixth bi-monthly Monetary Policy Statement for 2019-20 scheduled for Thursday.
• In the international markets, spot gold was flat at $1,556.36 per ounce after hitting a more than two-week low of $1,546.90 in the previous session.
• The United States released data that showed a rise in private payrolls and services sector activity in January. The country's trade deficit fell for the first time in six years in 2019 as the US-China trade conflict curbed its import bill. The S&P 500 index hit a new record high on Wednesday.
• On Thursday, China announced that it will halve tariffs on hundreds of American goods worth about $75 billion with effect from 14 February.
• The dollar index, that measures the American currency against a basket of rival currencies, rose to close to 2-month high on the back of US economic data, putting pressure on gold. The Indian rupee opened at 71.24 per dollar. A stronger dollar may lower the impact of global cues on gold prices in India.
• The safe-haven appeal of the metal was also curbed by the revival of risk sentiment on news reports of possible "breakthrough" drug that could treat people infected by the new coronavirus.
• As total death toll rises to 563, top European Central Bank executives said that the China virus outbreak's impact on global economic uncertainty may be short-term and temporary, limiting need for policy action.

Silver futures on MCX (March 2020) were trading slightly higher at Rs 45,870 per kg.