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Gold Hovers Near Two-week Low

Gold prices dipped on Wednesday to hover near their lowest level in two-weeks as businesses begin to reopen and new coronavirus cases decline.

Investors are also pinning hopes on the possibility of additional stimulus, with Japan and Europe expected to inject billions into their economies to minimize the economic fallout due to the coronavirus pandemic.

Spot gold eased 0.25 percent to $1,704.39 per ounce, with growing unrest in Hong Kong over Beijing’s proposed national security laws helping limit the downside. U.S. gold futures were down 0.4 percent at $1,698.70.

The Japanese government is likely to inject a fresh stimulus package worth $1.1 trillion on top of a $1.1 trillion package already rolled out by the government last month.

The European Commission is due to present its proposal for a bailout package, potentially backing efforts by France and Germany for a 500 billion-euro ($547 billion) fund to aid recovery efforts.

European Central Bank President Christine Lagarde said on a question and answer session today that the euro zone economy is likely to shrink between 8 percent and 12 percent this year.

On a live webinar, Lagarde said, the actual economic outcome would come between the ECB’s “medium” and “severe” scenarios. The mild scenario is outdated.

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