Conflicting accounts on the outbreak of COVID-19 create mixed impression about the spread of the disease: China has been reporting consistent decrease in the number of new cases and deaths and has lowered the emergency level in some cities while the rest of the world is preparing for a pandemic. On Tuesday, the US CDC announced that the local spread is inevitable and the only thing that remains unclear is the strength of the outbreak. The number of confirmed cases outside of China accelerated growth with cases in South Korea rising by 284, by 32 in Italy and by 44 in Iran. Iranian government said they were not going to impose any lockdowns what means either a significant infection spread or high economic risks of quarantine or both of these concerns. There are rumors about significant underreporting by Iranian government and the real figure is somewhere near 18,000. Ironically, Deputy Minister of Health of Iran has been also infected by coronavirus and ironically showed symptoms during press conference where he tried to assure public that the spread is under control:

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The outbreak has already affected more than 30 countries. The death toll outside of China is about 300 people.

Gold has completed the essential retracement thanks to the reports that China has lifted some restrictions and is likely to resume rally. The key level now is $1650, where there was a disagreement about price between buyers and sellers yesterday. A stable bear market is less likely in the current situation due to the growing risks of a pandemic and subsequent economic fallout. The end of the trading day above $ 1,650 per troy ounce should enable bulls to step up pressure.

Oil prices once again has slammed support at $50 mark as the bullish correction revealed no plans for continuation of the move. The bearish trend was fueled by rising pandemic risks which entail shock in demand for energy). Sustained decline below $50 is becoming more likely than a rebound as OPEC and Russia couldn’t find a common ground for plans to reduce supply so the expectations for a positive supply shock are now limited.

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A decline in European stock indices suggests that US stocks will record another day of red calling the Fed to cut rates again at next meetings. Nevertheless, an influential Fed member Richard Clarida said on Tuesday that it is too early to speculate about the negative effects of coronavirus on the US economy.

The rate of growth of confirmed cases in China, excluding Hubei, has slowed to a minimum since January 20 as the authorities have recorded only 9 new cases. Such a figure leads to assumption that draconian quarantine measures taken in other countries may have fast effect. Increasing level of awareness about the outbreak, rising the temperature in spring (which inhibits the spread of infection) are also expected to help to bring the virus outbreak under control.

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