Gold Falls to One-Week Low as Cyprus Deal Cuts Haven Use
Gold futures dropped to a one-week low after Cyprus agreed with euro-area finance ministers on a rescue package, reducing demand for the precious metal as a haven.
Cyprus received a 10 billion-euro ($13 billion) bailout after agreeing late yesterday to shrink its banking system. Gold advanced 1 percent last week amid concern that the European crisis would escalate. The Standard & Poor’s GSCI index of 24 raw materials jumped as much as 1.1 percent.
“The ‘risk-on’ appetite is back because of the overnight news out of Cyprus,” Steve Scacalossi, a New York-based vice president at TD Securities Inc., said in a telephone interview.
Gold futures for June delivery slipped 0.1 percent to settle at $1,606.50 an ounce at 1:42 p.m. on the Comex in New York. Earlier, the price touched $1,590.40, the lowest for a most-active contract since March 18.
The metal pared losses after Reuters reported that Dutch Finance Minister Jeroen Dijsselbloem said the Cyprus deal should be viewed as a template, and nations with large banking industries must look to restructure and reduce their size.
Silver futures for May delivery rose 0.4 percent to $28.815 an ounce in New York.
On the New York Mercantile Exchange, platinum futures for July delivery advanced 0.1 percent to $1,586.90 an ounce.
Gold and platinum trading was double the average volume in the past 100 days.
Palladium futures for June delivery dropped 0.6 percent to $757.35 an ounce.
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