March 22, 2013 / 2:06 AM / 4 years ago

PRECIOUS-Gold heads for biggest weekly rise in 4 months on Cyprus

4 Min Read

* Cyprus crisis may keep gold sentiment buoyant in short
term
    * Spot gold may peak below $1,626/oz - technicals
 
    * Coming up: U.S. CFTC commitment of traders data; 1930 GMT

 (Adds details; updates prices)
    By Rujun Shen
    SINGAPORE, March 22 (Reuters) - Gold traded near a
3-1/2-week high on Friday, underpinned by safe-haven demand on
the fear of a potential financial meltdown in Cyprus, which has
put bullion on track for its biggest weekly rise in four months.
    The clock is ticking for Cyprus to come up with a solution
to clinch an international bailout, otherwise it could face the
collapse of its financial system and likely exit from the euro
zone.  
    The Cyprus crisis has offered gold a helping hand, after
investors had been pulling out of the precious metal and piling
into stock markets which have rallied this year on a brighter
economic outlook.  
    Spot gold was little changed at $1,612.96 an ounce by
0651 GMT, after rising to a 3-1/2-week high of $1,616.36 in the
previous session. The metal was headed for a weekly gain of
about 1.3 percent in its third weekly ascent, its biggest weekly
rise in four months.
    U.S. gold traded nearly flat at $1,612.40, on course
for a 1.2 percent weekly gain.
    "Gold is likely to stay firm in the short term thanks to
Cyprus," said Li Ning, an analyst at Shanghai CIFCO Futures.
    "Though Cyprus is a small economy, there are concerns about
the risk of contagion if the crisis there doesn't get solved
properly."
    Euro zone finance ministers offered a $13 billion bailout
last weekend but demanded a levy on deposits in Cyprus, which
shocked investors and triggered worries that similar measures
could be imposed on other countries.

    
    
    EYES ON KEY RESISTANCE AT $1,620/OZ
    Traders and analysts are eyeing key resistance at $1,620 an
ounce, a price unseen since Feb. 26. A break above that level
could rekindle enthusiasm in trading.
    "The slow movement in prices has really drained the interest
in the market," said a Hong Kong-based trader.
    "If we can break through $1,620, more people will take a
look at it and think maybe there will be some momentum."
    But there is considerable pressure from the continuous
outflow from gold-backed exchange-traded funds. Holdings of
these funds are seen as a barometer of investment interest in
gold.
    Holdings of SPDR Gold Trust, the world's largest gold
ETF, fell 0.902 tonnes from the previous session to 1,221.26
tonnes on March 21, the lowest since July 2011. The fund is
headed for a twelfth week of outflows. 
    The new Bank of Japan governor is expected to take
aggressive steps to kick-start the world's third-largest economy
in its first policy meeting early next month, which could
support sentiment in gold as a hedge in its role as a hedge
against inflation. 
    "The bar is very high now for people to buy gold based on
the idea that central banks are being overactive," said the Hong
Kong-based trader. "But there is still logic to the argument
that it's going to be gold supportive going forward."
    
      Precious metals prices 0142 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1613.90   -0.19   -0.01     -3.62
  Spot Silver        29.10   -0.03   -0.10     -3.90
  Spot Platinum    1570.49   -6.88   -0.44      2.31
  Spot Palladium    748.22   -5.28   -0.70      8.12
  COMEX GOLD APR3  1613.30   -0.50   -0.03     -3.73         3911
  COMEX SILVER MAY3  29.09   -0.12   -0.42     -3.77         1105
  Euro/Dollar       1.2909
  Dollar/Yen         94.85
  COMEX gold and silver contracts show the most active months
 
 (Editing by Richard Pullin)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below