Gold Prices Gain as Fed, Cyprus Offer Support (Update 1)
Gold and the U.S. dollar have moved in tandem since the trading week began as uncertainties over a possible Cyprus bailout plan, including whether the small island nation-state would impose a haircut on bank deposits, made gold an appealing safe-haven play and put the euro currency on rocky footing.
The Cypriot parliament voted earlier this week against the tax on deposits, but banks there remained closed as the European Central Bank was withholding funding for the near-insolvent banking sector.
"The uncertainty surrounding Cyprus -- it's bailout situation, we've got Russia and the IMF seemingly wrangling over aid to Cyprus -- and all that's causing uncertainty in the marketplace, which is benefiting the safe-haven gold market," Jim Wyckoff, senior metals analyst at Kitco.com, said in an interview.
Wyckoff said fresh speculative interest has entered the gold market this week on strong technical support for the precious metal. Gold settled over $1,600 an ounce on Monday, following the Cyprus news, which technical analysts had noted as a key resistance level. The move above that level suggested positive upward momentum in the market.Gold mining stocks were mostly higher on Thursday. Shares of Yamana Gold (AUY) were rising 3% and shares of Randgold Resources (GOLD) were up 3.2%. Among volume leaders, Barrick Gold (ABX - Get Report) was increasing 2.9%. Gold ETF SPDR Gold Trust (GLD) was tacking on 0.62%, while iShares Gold Trust (IAU) was gaining 0.55%. -- Written by Joe Deaux in New York. >Contact by Email. Follow @JoeDeaux
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