Shutterstock photo
Markets

Gold falls on waning Cyprus fears, takes Fed decision in stride

Shutterstock photo

Shutterstock photo

Investing.com - Gold prices retreated in U.S. trading on Wednesday as fears began to wane that Cyprus will slap taxes on bank accounts or risk leaving the eurozone, which allowed the euro to regain strength and ate away at gold's appeal as a hedge.

The commodity took the Federal Reserve's decision to leave interest rates unchanged largely in stride.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery were down 0.37% at USD1,605.40 a troy ounce in U.S. trading on Wednesday, up from a session low of USD1,601.20 and down from a high of USD1,613.90 a troy ounce.

Gold futures were likely to test support USD1,590.80 a troy ounce, Monday's low, and resistance at USD1,614.60, Tuesday's high.

The Cypriot parliament on Tuesday rejected calls to tax banking accounts holding at least EUR20,000 to help come up with EUR5.8 billion needed to qualify the country for a EUR10 billion multilateral bailout package.

Fears that a rejection of the bank deposit tax may risk losing bailout money began to wane, as hopes began to build Cyprus may seek help elsewhere, possibly in Russia, home to a sizeable portion of Cypriot depositors.

Easing fears allowed the euro to erase earlier losses, which came at gold's expense.

Meanwhile the Federal Reserve left interest rates unchanged at near zero and made no changes to its monthly USD85 billion bond-buying program known as quantitative easing.

Such loose policies are normally bullish for gold by keeping the dollar weak, though the Fed's announcement came as little surprise to traders who already priced in such an outcome.

Elsewhere on the Comex, silver for May delivery was down 0.11% at USD28.810 a troy ounce, while copper for May delivery was up 1.21% and trading at USD3.447 a pound.

Investing.com - Investing.com offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

Read more News on Investing.com or Follow us on Twitter at @ Newsinvesting

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

ForEx