Gold prices inched lower on Friday after surveys showed Chinese manufacturing activity held steady in January and services firmed, although concerns over the coronavirus and its economic impact kept the metal on track for a second monthly gain.
FUNDAMENTALS
Spot gold fell 0.1 per cent to $1,571.77 per ounce by 0124 GMT. For the month, prices were up 3.6 per cent. US gold futures declined 0.8 per cent to $1,570.70.
Factory activity in China stalled in January, with the outbreak of the new virus adding to risks facing the economy despite easing trade tensions, while growth in the services sector activity quickened.
This came after the World Health Organization (WHO) declared the coronavirus a global emergency, as the death toll in China reached 213 and cases spread to at least 18 countries.
Director-General Tedros Ghebreyesus said the WHO “doesn’t recommend – and actually opposes” restrictions on travel or trade with China, and that measures taken by Beijing can “reverse the tide”.
The US economy missed the Trump administration’s 3 per cent growth target for a second straight year, posting its slowest annual growth in three years in 2019.
The US House of Representatives passed two pieces of legislation on Thursday seeking to rein in President Donald Trump’s ability to deploy US forces to fight abroad.
The virus outbreak in China is emerging as a potentially major new risk to the global economy and leaving policymakers, still grappling with the impact of the Sino-US trade war, fretting over the widening fallout.
On the Brexit front, the United Kingdom leaves the European Union on Friday for an uncertain future.
India’s gold demand is expected to rebound in 2020 as the government seeks to bolster consumer confidence and spending power to revive Asia’s third-biggest economy, the World Gold Council (WGC) said.
Palladium rose 0.3 per cent to $2,316.71 an ounce. Prices were set to gain of 19 per cent this month, but were down nearly 5 per cent this week.
Silver fell 0.2 per cent to $17.79 and was down 1.5 per cent for the week, its biggest since the week ended Dec. 6, while platinum climbed 0.4 per cent to $981.63 and was on track to decline 2 per cent for the week.
Source: Economic Times
