Gold prices on Thursday eased from their highest in nearly seven years in the previous session, as safe-haven demand took a hit after a dramatic drop in new coronavirus cases and on expectations that China will continue to shore up its economy.

FUNDAMENTALS
Spot gold was down 0.2% at $1,607.49 per ounce, as of 0100 GMT. In the previous session, bullion prices surged to their highest since March 25, 2013 at $1,612.62.

U.S. gold futures remained unchanged at $1,612.40.

China reported on Thursday a drop in new cases in the province at the heart of the coronavirus outbreak. Cases in Hubei province were 349 on Wednesday from 1,693 a day earlier and the lowest since Jan. 25, although it was accompanied by a change in methodology.  

Asian share markets edged higher as worries over the virus outbreak alleviated.

China is widely expected to cut its benchmark lending rate on Thursday, adding to a slew of fiscal and monetary measures in recent weeks, aimed at cushioning the virus impact on the economy.

U.S. Federal Reserve policymakers were cautiously optimistic about their ability to hold interest rates steady this year, minutes of the central bank's last policy meeting showed, even as they acknowledged new risks caused by the outbreak.

A meeting of U.S. government officials to discuss further curbs on exports to Huawei and China is still on for Thursday, despite a pushback from President Donald Trump against stricter limits on shipments of U.S. products overseas.

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust , rose 0.2% to 931.60 tonnes on Wednesday.

Palladium advanced 0.6% to $2,728.50 an ounce. In the previous session, the auto-catalyst metal touched a record high of $2,841.54.

Silver was down 0.4% at $18.33, but hovered near a more than one-month high hit in the last session, while platinum fell 0.5% to $1,000.71.

DATA/EVENTS (GMT)
0745   France   CPI (EU Norm) Final MM, YY  Jan
0930   UK        Retail Sales MM, YY               Jan
0930   UK        Retail Sales Ex Fuel MM         Jan
1330   US        Initial Jobless Claims             Weekly
1330   US        Philly Fed Business Indx         Feb

(Reporting by Asha Sistla in Bengaluru, Editing by Sherry Jacob-Phillips)

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