March 21, 2013 / 6:55 PM / 7 years ago

PRECIOUS-Gold hits nearly 1-month high on fears over Cyprus

* Safe-haven bids lift gold, silver as Wall St down
    * EU gives Cyprus ultimatum, euro exit seen possible
    * Gold rises for five out of six sessions

    By Frank Tang
    NEW YORK, March 21 (Reuters) - Gold rose to a nearly
one-month high on Thursday, as safe-haven buying emerged after
the European Union gave Cyprus an ultimatum to raise billions of
euros it needs to clinch a bailout or face a likely exit from
the euro zone.
    The metal has risen in five of the last six sessions on
resurgent fears about the euro zone's debt problems, and on
hopes that the U.S. Federal Reserve will maintain aggressive
stimulus to battle still-high unemployment. 
    Silver rose 1.5 percent for its biggest one-day gain in
almost two months.
    The European Central Bank said it would cut off liquidity to
Cypriot banks, and a senior EU official said the bloc was ready
to see the bankrupt island banished from the euro zone. Earlier
this week, global markets slid as Cypriot lawmakers rejected a
plan to tax bank deposits to repay debt. 
    "The Cyprus situation has ignited purchasing of gold from
the public who are now becoming concerned that the same can
happen where they live," said Miguel Perez-Santalla, vice
president at online precious metals exchange BullionVault.
    Spot gold rose to $1,616.36 an ounce, its highest
since Feb. 26. It was later up 0.6 percent at $1,615.35 by 2:10
p.m. EDT (1810 GMT).
    For the week, gold is set for a gain of 1.5 percent, which
would be its biggest one-week rise since November.
    Technical analysts said gold looked set for more gains after
it broke above $1,613, downward trendline resistance on daily
    U.S. gold futures for April delivery settled up
$6.30 at $1,613.80, with trading volume about 20 percent below
its 250-day average, preliminary Reuters data showed.
    Safe-haven bids were evident as U.S. equities slid after
Cyprus' central bank governor said the island's government would
take measures to consolidate its banking sector, including steps
to avoid bankruptcy at its second-largest lender, Cyprus Popular
    Wall Street's drop overshadowed a batch of data suggesting
U.S. economic recovery was on the right track. 
    However, analysts said weakness from wider markets related
to uncertainty surrounding Cyprus could also pressure gold as
investors sold bullion to cover losses elsewhere.
    Gold's 12-year bull run has benefited in the last three
years from the euro zone crisis. In September 2011, fears about
Greece's debt problems sent bullion to a record high of $1,920
an ounce while equities plunged.
    Silver, which is widely used in industrial applications,
outperformed gold after data showed a pickup in the growth of
China's vast manufacturing sector. 
    Spot silver gained 1.5 percent to $29.19.
    Among platinum group metals, platinum rose 0.3
percent to $1,578.74, while palladium was down 0.5
percent at $753.50.
    Investors were digesting news that Switzerland's palladium
exports jumped last month to their highest since September 2008.
 2:10 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold APR   1613.80   6.30   0.4  1603.60 1616.50  116,819
 US Silver MAY  29.212  0.395   1.4   28.705  29.325   33,131
 US Plat APR   1580.10  -2.40  -0.2  1575.90 1587.90    9,865
 US Pall JUN    756.85  -1.35  -0.2   752.20  768.00    3,200
 Gold          1615.35   9.46   0.6  1605.03 1616.36         
 Silver         29.190  0.430   1.5   28.770  29.320
 Platinum      1578.74   4.24   0.3  1577.50 1585.00
 Palladium      753.50  -3.50  -0.5   756.50  764.25
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        153,965   192,110   175,415     12.91   -0.45
 US Silver       35,971    60,006    52,260     21.33    0.22
 US Platinum     14,981    14,516    11,007     14.95   -4.37
 US Palladium     3,387     8,230     5,234
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