Gold and silver prices gained in Indian markets today, lifted by higher global rates. On MCX, February gold futures rose 0.52% to 40,560 per 10 gram, extending gains to the third day. Tracking gold, silver also edged higher. Silver futures on MCX gained 0.76% to 47,291 per kg. In global markets, gold rates rose 0.6% to $1,586 an ounce as concerns over the spread of coronavirus in China spurred investors to buy the safe-haven metal. Worries over the potential impact on global economy has hurt global equity sentiment. On the other hand, Silver jumped 0.9% to $18.24.

China's health authorities on Sunday said coronavirus transmission ability is getting stronger as the death toll reached 80 and the number of infected rose over 2,000.

"The increased spread of coronavirus in China has led to a shift from riskier assets to safe havens. The biggest factor in focus at present is the virus outbreak in China which threatens to have a widespread impact on Chinese and global economy. We have already seen a shift from riskier assets to safe haven assets but market nerves may remain frayed unless there are signs that virus can be contained soon," said Ravindra Rao, head of commodity research at Kotak Securities.

"However, increasing risks to Chinese economy also threatens to affect consumer demand for gold hence upside movement may be limited. If the spot gold price sustains above $1588 ounce the bulls might target $1600," he added.

Apart from the progress of the virus outbreak in China, gold traders will also keep a close eye on the US Federal Reserve's first meeting of this year, scheduled on January 28-29.

Gold demand in many Asian markets, including in India, remained subdued last weak, reports said. In India, Reuters reported, dealers offered discounts of up to $11 an ounce over official domestic prices. Gold prices in India include 12.5% import tax and 3% GST.

Gold dealers were also waiting for the budget, to be presented on February 1, before making large purchases, the report said, citing a dealer. In last year's budget, the government had raised import tax on gold to 12.5% from 10% earlier.

According to reports, the commerce ministry has sought a reduction in gold import duty to boost the jewellery sector.

High prices also weighed on demand. Earlier this month, gold had hit a record high of 41,293 per 10 gram. However, wedding season demand could support gold prices, said a dealer.

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