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PRECIOUS-Gold hovers above $1,600/oz on Cyprus concerns
March 19, 2013 / 3:41 AM / 5 years ago

PRECIOUS-Gold hovers above $1,600/oz on Cyprus concerns

* Safe haven bids support gold, but investors lukewarm
    * SPDR Gold Trust posts biggest daily loss in nearly a month
    * Spot gold faces resistance at $1,611/oz -technicals
    * Coming Up: U.S. house starts; 1230 GMT

 (Adds details, comments; updates prices)
    By Rujun Shen
    SINGAPORE, March 19 (Reuters) - Gold hovered near a
2-1/2-week high on Tuesday, as nervousness around Cyprus'
upcoming vote on a levy on bank deposits supported safe haven
interest in gold, but investors were sceptical if such support
would be sustained.
    The Cypriot parliament delayed the vote on the savings tax
to Tuesday, and euro zone ministers agreed to give Cyprus more
flexibility in exempting depositors with less than 100,000 euros
from the tax. 
    The radical bailout package announced over the weekend has
not managed to change general expectations for a global economic
recovery among investors, whose interest in safe havens such as
gold remains sluggish.
    SPDR Gold Trust, the world's biggest gold-backed
exchange-traded fund, posted its biggest daily decline in nearly
a month on Monday despite a gain of 0.8 percent in gold prices.
    "There are worries, but the extent of such worries is
limited, reflected in the fact that some investors panicked and
others used the opportunity to pick up (risky assets)," said
Jiang Shu, an analyst at China's Industrial Bank.
    "After all, the U.S. economy is doing much better than 2009
and 2010, which helped blunt the blow from Cyprus."
    Spot gold was little changed at $1,605.56 an ounce by
0320 GMT, near a 2-1/2-week high of $1,610.81 hit in the
previous session.
    U.S. gold traded nearly flat at $1,604.70.
    Technical analysis suggested spot gold faces resistance at
$1,611 an ounce and may either hover below this level or retrace
to $1,593, Reuters market analyst Wang Tao said. 
    In a sign of ebbing fear, Asian shares rebounded and the
euro pulled back from a three-month low against the dollar hit
on Monday. 
    The U.S. Senate inched closer on Monday to passage of a bill
to fund federal agencies through Sept. 30 and avoid a government
shutdown when existing funds run out at the end of March,
alleviating fears that spending cuts would derail the economic
    Investors will be watching the Federal Reserve's policy
meeting held on Tuesday and Wednesday, expecting little change
on the central bank's monetary policy but possibly a more
positive tone in assessment of the economy. 
    Spot platinum was little changed at $1,578, off a
two-week low of $1,567.75 an ounce hit in the previous session.
Spot palladium bounced off a 1-1/2-week low of $750.22
and traded at $762.25.
      Precious metals prices 0320 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1605.56    0.76   +0.05     -4.12
  Spot Silver        28.98    0.14   +0.49     -4.29
  Spot Platinum    1578.00    1.25   +0.08      2.80
  Spot Palladium    762.25   -0.25   -0.03     10.15
  COMEX GOLD APR3  1604.70    0.10   +0.01     -4.24         6287
  COMEX SILVER MAY3  28.96    0.08   +0.28     -4.22         1802
  Euro/Dollar       1.2956
  Dollar/Yen         95.65
  COMEX gold and silver contracts show the most active months
 (Editing by Clarence Fernandez)

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