Gold gains as Cyprus fears weaken euro, Fed decision supports

Shutterstock photo - Gold prices rose in U.S. trading on Thursday as uncertainty as to how Cyprus will meet requirements to tap bailout funding weakened the euro and bolstered the precious metal's status as a hedge to sliding paper currencies.

A Federal Reserve decision to keep monetary policy loose in the U.S. sent prices gaining as well.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery were up 0.41% at USD1,614.10 a troy ounce in U.S. trading on Thursday, up from a session low of USD1,603.70 and down from a high of USD1,615.80 a troy ounce.

Gold futures were likely to test support USD1,601.20 a troy ounce, Wednesday's low, and resistance at USD1,619.40, the high from Feb. 26.

The Cypriot parliament rejected a E.U. proposal to slap taxes on bank deposits, though the country must still find ways to raise EUR5.8 billion if it wishes to tap a EUR10 billion financial assistance package arranged by its European neighbors and the International Monetary Fund

A bank holiday remains in effect until Monday, which gives European policymakers more time to find a way out of the crisis, yet uncertainty drove the euro lower on Thursday and sent investors snapping up safe-haven gold positions..

Meanwhile, the Federal Reserve said on Wednesday it was keeping monetary policy loose, which weakened the greenback to the point that gold served as the safe harbor of choice amid European uncertainty.

The Fed said after its March monetary policy meeting concluded that it was keeping interest rates near zero and added it was making no changes to its USD85 billion monthly bond-buying program, which weakens the greenback by flooding the economy with liquidity to encourage investing and hiring.

Elsewhere on the Comex, silver for May delivery was up 1.45% at USD29.235 a troy ounce, while copper for May delivery was down 0.32% and trading at USD3.435 a pound. - 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.

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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.

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