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Gold Prices Ease But Remain At High Levels As WHO Declares Coronavirus A Global Health Emergency

Olga Robert

Gold prices inched lower on Friday after a survey showed that factory activity in China remained steady and WHO showed confidence in Beijing's capacity to control the coronavirus outbreak.

However, the precious metal's rate in India stayed over Rs 40,000 per 10 gram as concerns over the economic impact of the health hazard failed to die down.

On MCX, gold futures were trading 0.71 percent lower at Rs 40,685 per 10 grams after having touched an intraday high of Rs 41,014. Silver futures were down by 1.03 percent to Rs 46,430/kg.

In the international market, spot gold fell 0.1 percent to $1,571.77 per ounce, but its set for a monthly gain of 3.6 percent.

China's official manufacturing Purchasing Managers' Index (PMI) on Friday came in at 50.0 for January, however, the National Bureau of Statistics said that the impact of the coronavirus outbreak was not fully reflected in PMI data as the survey was conducted before 20th of the month.

Despite easing trade tensions, there are risks facing the world's second-largest economy with the outbreak of the new virus.

On Thursday, the World Health Organization (WHO) declared coronavirus a global emergency, as the death toll in China reached 213 and confirmed cases were reported in at least 18 countries.

WHO Director-General Tedros Ghebreyesus said that the organisation "doesn't recommend - and actually opposes" restrictions on travel or trade with China and that measures taken by Beijing can "reverse the tide".

"The main reason for this declaration is not because of what is happening in China, but because of what is happening in other countries," Ghebreyesus said and added that he has confidence in China's capacity to control the outbreak.

Previous emergencies have included Ebola, Zika and H1N1.

Further, the US economy missed Trump administration's 3 percent growth target for a second straight year and posted its slowest annual growth in three years in 2019.

Gold is considered a safe-haven asset in times of economic and geopolitical uncertainties like these.

The virus outbreak has emerged as a new potential risk to the global economy that only recently recovered from the impact of the US-China trade war.

Meanwhile, a recent World Gold Council (WGC) report said that India's demand for gold is expected to revive in 2020.

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