PRECIOUS-Gold rebounds after hitting 1-week low on Cyprus deal
* Gold to retest $1,550 in 3 months -technicals * Hedge funds, money managers raise bullish bets in gold * Coming Up: Fed Chairman Bernanke speaks; 1715 GMT (Adds quotes, updates prices) By Lewa Pardomuan SINGAPORE, March 25 (Reuters) - Purchases from jewellery makers in Asia plucked gold from a 1-week low on Monday as investors turned to equities after Cyprus struck a last-minute bailout deal with lenders. Investors had flocked to gold earlier this month as the crisis in Cyprus re-ignited euro zone debt fears, sending bullion prices to a 1-month high around $1,616 an ounce last week. But the deal with international lenders averted a collapse of the island's banking system, and safe haven gold lost its appeal, with physical buyers emerging to snap up bargains. Gold was little changed at $1,607.96 an ounce by 0711 GMT after earlier hitting $1,602.59, its weakest since March 19. "With the price behaving like a yo-yo in this kind of range, what we are seeing is just buying on dips," said a dealer in Singapore. "If it goes back up to $1,612 or above, people will sell." The precious metal touched a record high of around $1,920 in September 2011, when a worsening debt crisis in Europe sparked a buying rush. Gold's 12-year bull run has benefited in the last three years from the euro zone crisis. U.S. gold futures for April delivery was at $1,607.30 an ounce, up 1.20. Gold was also supported as the euro firmed after the Cyprus deal, which involves winding down Popular Bank of Cyprus, also known as Laiki, and shifting deposits below 100,000 euros to the Bank of Cyprus to create a "good bank". . The agreement between Cyprus and the lenders came hours before a deadline to avert a collapse of the banking system in negotiations between President Nicos Anastasiades and heads of the European Union, the European Central Bank and the International Monetary Fund. Failure to clinch a deal could cause a financial market selloff, but some analysts said the island's small size - it accounts for just 0.2 percent of the euro zone's economic output - meant contagion would be limited. "After all, Cyprus is such a small economy. People were getting more and more certain a deal would eventually be struck," said Joyce Liu, an investment analyst at Phillip Futures, referring to the intraday low. "If you look at the chart, I would say there is still weakness in gold prices because it has failed to break $1,620," she added. The physical gold market saw buying interest after prices dipped, keeping premiums for bullion bars steady in Hong Kong at $1.20 to $1.50 an ounce above spot prices and at $1.20 in Singapore. "There's light buying at below $1,610. I think sentiment is a bit mixed because people may want to concentrate on the stock markets. They liquidate ETF and buy the money to buy shares," a dealer in Hong Kong said. Hedge funds and money managers raised their bullish bets in gold by 63 percent in the week ending March 19, Commodity Futures Trading Commission data showed on Friday. Holdings of SPDR Gold Trust, the world's largest gold ETF, fell 0.9 tonnes from the previous session to 1,221.26 tonnes on Thursday, the lowest since July 2011. Precious metals prices 0711 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1607.96 0.01 +0.00 -3.98 Spot Silver 28.77 0.10 +0.35 -4.99 Spot Platinum 1581.00 1.50 +0.09 3.00 Spot Palladium 760.00 2.15 +0.28 9.83 COMEX GOLD APR3 1607.30 1.20 +0.07 -4.09 21862 COMEX SILVER MAY3 28.81 0.11 +0.39 -4.70 5571 Euro/Dollar 1.3025 Dollar/Yen 94.72 COMEX gold and silver contracts show the most active months (Additional reporting by Rujun Shen; Editing by Himani Sarkar and Tom Hogue)
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