Gold Prices Soften As China Returns To Work

On Wednesday, gold prices in the international markets eased after stock markets in Asia climbed as investors closely monitored China's progress in returning to work as the country deals with the coronavirus outbreak.

On MCX, gold futures (April 2020) fell 0.07 percent to Rs 41,389 per 10 grams. Spot gold was down by 0.1 percent to $1,600.67 an ounce.

In the previous session, the bullion in the global market had climbed 1.3 percent to $1,605.10, its highest since 8 January, amid a decline in the equity markets.

BSE's Sensex breached the 41,000 points mark, while NSE's Nifty 50 climbed beyond the 12,000 points mark.

New infection cases in Wuhan, the Chinese province at the epicentre of the coronavirus outbreak, fell for a second straight day on Wednesday to 1,693, but the number of deaths rose. However, the World Health Organization has cautioned there isn't enough data yet to know if the epidemic had slowed.

Some 500 passengers from the Diamond Princess, the coronavirus infected cruise ship in Japan, were allowed to disembark after testing negative. They had been quarantined for 14 days to control the spread of the virus.

The Chinese State media, on Tuesday, reported that more than 80 percent of its central state-owned enterprises' roughly 20,000 manufacturing subsidiaries have resumed work.

Further, investor confidence improved after China's decision to grant exemptions on retaliatory duties imposed against 696 American goods, the most substantial tariff relief to be offered so far as Beijing continues to show its commitment to the trade deal with the US.

On 17 February, Chinese policymakers had also implemented a raft of measures to support its economy that is going to see a severe impact on first-quarter growth due to the epidemic.

Gold price was above the $1,600 as concerns of the after-effects of the virus outbreak remain, increasing the appeal for the safe-haven asset. On Tuesday, Apple Inc warned that it does not expect to meet its quarterly revenue forecast citing slowed production and weakened demand in China due to the virus.

The epidemic is expected to impact businesses in China and around the world and drag down global economic growth. Moody's Investors Service has lowered the growth forecast for China from 5.8 percent to 5.2 percent for 2020.