BLBG:Gold Falls From 3-Week High as ETP Drop Overshadows Cyprus Woes
Gold retreated in London as holdings in the biggest exchange-traded fund backed by bullion resumed a decline as concerns that Europe’s debt crisis is escalating failed to take prices above $1,620 an ounce.
Gold holdings in the SPDR Gold Trust, down 9.6 percent this year, fell 0.9 metric ton to 1,221.26 tons as of yesterday. They added 2.71 tons on March 19, which was the first gain since Feb. 7. Gold rose 1.3 percent this week in the best performance since November as turmoil in Cyprus reignited concern Europe’s debt crisis will worsen. Cypriot lawmakers begin debate today on legislation intended to unlock bailout funds.
“The outflows from ETPs obviously don’t help as one at least would have expected unchanged to a slight increase in holdings this week considering the raised uncertainty and the higher prices,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “With all the bad news out there in terms of Cyprus and its potential wider implications many would probably have been looking for a decisive break above $1,620. As it has not happened, some long liquidation is lurking.”
Bullion for immediate delivery slid 0.1 percent to $1,613.15 an ounce by 9:13 a.m. in London, paring a third weekly gain. The metal climbed to $1,617.07 yesterday, the most expensive since Feb. 26. Gold for April delivery lost 0.1 percent to $1,611.80 on the Comex in New York.
Futures trading volumes were 28 percent lower than the average for the past 100 days for this time of day, according to figures compiled by Bloomberg.
Euro-area finance ministers are considering a plan to shutter the two biggest banks in Cyprus and freeze assets of uninsured depositors, while the European Central Bank said it may cut off emergency funds to the nation’s banks after March 25 unless a solvency plan is in place.
Silver for immediate delivery slipped 0.2 percent to $29.10 an ounce. Platinum was little changed at $1,582.70 an ounce, set for a second weekly decline. Palladium decreased 0.2 percent to $753.73 an ounce, for a 2.9 percent drop this week.
To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
