Gold Prices Settle Higher on Cyprus Unknowns (Update 2)

Updated from 12:39 a.m. ET with settlement prices

NEW YORK ( TheStreet) -- Gold prices were ticking higher midday Wednesday as uncertainties in Europe, specifically Cyprus, continued to put pressure on the euro and bring some safe-haven appeal to the yellow metal.

Gold for June delivery at the COMEX division of the CME settled up $9.90 to $1,607.20 an ounce. The gold price traded as high as $1,608.50 and as low as $1,591.90, while the spot price was gaining $7.40, according to Kitco's gold index.

"There's little to say on gold over the last few days; the temporary solution with Cyprus has relieved the markets," said Anne-Laure Tremblay, precious metals strategist at BNP Paribas. "The lack of interest for gold can also be seen through the small level of volatility, which if you look at the realized volatility, it's really quite low."

The small Mediterranean island nation-state was determining capital controls for its financial institutions ahead of Thursday, when it is expected to reopen its banks.

This has come after the International Monetary Fund, European Commission and European Central bank agreed with the Cypriot government to the terms of a deal that would unlock $12.8 billion (€10 billion) to recapitalize the country's banks.

"The fact that euro is down, gold is higher, to me, relatively, it's strong. Not a lot of volume, but still there's that European bid in gold here," said Thomas Vitiello, principal at Aurum Options Strategies, LLC. "This Cyprus issue is unfolding, it's not pretty and tomorrow the banks open -- who knows what that will look like on television?"

Silver prices weren't benefiting from the rise in gold as May contracts slid 7 cents to close at $28.61, while the U.S. dollar index was gaining 0.45% to $83.23.

The greenback was strengthening to $1.2776 against the euro on Wednesday, from its prior-day close at $1.2860.

Non-commercial futures positions have rebounded as a share in open interest, which is a positive factor lending some support to the yellow metal, BNP Paribas' Tremblay said. Investors, though, should not necessarily read this as a bullish upswing. Tremblay said these positions historically are still low, but that we are seeing a change of trend. She said it's a slight move to a more neutral outlook, from a previous bearish attitude in gold.

Gold trading volumes were average on the COMEX before the holiday weekend.

A lineup of Federal Reserve officials were speaking on Wednesday, including Chicago Fed President Charles Evans, Boston Fed President Eric Rosengren, Cleveland Fed President Sandra Pianalto and Minneapolis Fed President Narayana Kocherlakota.

Gold mining stocks were mostly higher on Wednesday. Shares of Eldorado Gold ( EGO) were rising 2.3%, and shares of Goldcorp ( GG) were up 2.2%.

Among volume leaders, Barrick Gold ( ABX) was adding 2%.

Gold ETF SPDR Gold Trust ( GLD) was increasing 0.45%, while iShares Gold Trust ( IAU) was ticking higher by 0.39%.

-- Written by Joe Deaux in New York.

>Contact by Email.

If you liked this article you might like

Here's What Stocks You Want to Own in the Event of a War With North Korea

Gold, Google, SEC Hack - 5 Things You Must Know Before the Market Opens Thursday

Here's the Hottest New Way to Get Rich With Gold

How to Invest in Unstoppable Gold Prices

Novice Trade: Gold ETF