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Gold Futures Jump to Two-Week High on European Debt Woes

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March 18 (Bloomberg) -- Gold jumped to a two-week high, topping $1,600 an ounce, as concern that Europe’s debt crisis will escalate increased the appeal of the metal as a haven.

The MSCI All-Country World Index of equities slumped as much as 1.4 percent, and the euro slid the most in 14 months against the dollar after European finance ministers proposed a levy on bank deposits in Cyprus as part of a bailout. Gold climbed to a record $1,923.70 in September 2011, partly because of Europe’s fiscal woes.

“The Cyprus news spooked the financial markets,” Tim Gardiner, a managing director at TD Securities Inc. in New York, said in a telephone interview. “Gold is getting some safe-haven bids.”

Gold futures for April delivery rose 0.8 percent to settle at $1,604.60 at 1:38 p.m. on the Comex in New York. Earlier, the metal reached $1,610.40, the highest for a most-active contract since Feb. 27.

A vote by the Cypriot parliament on the tax was postponed until tomorrow. European policy makers signaled flexibility on the application of the unprecedented levy. A poll showed 71 percent of Cypriots said that the government should reject the plan, and people lined up at cash machines to withdraw funds.

Silver futures for May delivery rose 0.1 percent to $28.874 an ounce on the Comex.

On the New York Mercantile Exchange, platinum futures for April delivery fell 0.8 percent to $1,579.20 an ounce.

In the spot market, an ounce of platinum bought as little as 0.9813 ounce of gold, the lowest since Jan. 14.

Palladium futures for June delivery slumped 1.4 percent to $764.85 an ounce on the Nymex, the biggest drop since March 1.

To contact the reporters for this story: Debarati Roy in New York at droy5@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net