Gold prices eased on Wednesday as expectations about economic recovery as well as hopes of more stimulus dampened demand for the safe-haven metal.
Spot gold eased half a percent to $1,719.17 per ounce, after having declined 0.7 percent on Tuesday. U.S. gold futures were down 0.55 percent at $1,724.75.
China’s service sector expanded for the first time in four months in May while
services sector activity in Japan contracted at a slower rate in the month, pointing to recovery from the coronavirus pandemic.
The euro zone services purchasing managers index rose to 30.5 in May from 12 in April, above the flash reading of 28.7 and a three-month high
On the stimulus front, South Korea announced the largest ever supplementary budget, and the third this year, to counter the economic fallout from the coronavirus.
Speculation is rife that the European Central Bank will deliver additional stimulus by around 500 billion euros, when it meets on Thursday.
Policymakers “will need to consider negative interest rates” in getting the U.S. economy back to strong growth, St. Louis Fed economist Yi Wen said in a paper.
Fed officials will provide new forecasts for the economy and the appropriate path for interest rates at their June 9-10 meeting.