Gold traded little changed, set for the worst quarterly run since 2001, as the reopening of banks in Cyprus eased immediate concern Europe’s debt crisis will deepen, reducing the precious metal’s appeal as a store of wealth.
Gold for immediate delivery was at $1,596.50 an ounce at 2:31 p.m. in Seoul from $1,596.83 yesterday. Prices have fallen 4.7 percent this quarter, following a 5.5 percent slump in the three months through December, the first back-to-back losses since 2001. Cash gold was 0.5 percent lower at 319.60 yuan ($51.47) a gram on the Shanghai Gold Exchange.
A shopper looks at gold jewelry and ornaments at a gold and silver shop in Shanghai. Photographer: Qilai Shen/Bloomberg
The euro gained as Cyprus’s banks reopened with new rules curbing access to cash after being closed since March 16. Bullion is down after its 12-year bull run amid speculation the Federal Reserve will rein in stimulus.
“Our economists believe the contagion risks are limited, so it would appear that risk aversion has not risen high enough for gold to regain its sparkle just yet,” Suki Cooper, a precious metals analyst at Barclays Plc, said in a report e- mailed today.
Cyprus this week obtained a 10 billion-euro international bailout after the island agreed to shut down its second-largest lender and impose losses on uninsured deposits of more than 100,000 euros. The deal replaced a previous euro-area demand to impose a levy on all bank accounts. The 17-nation currency traded at $1.2825 after rising as much as 0.2 percent earlier.
Gold holdings in exchange-traded products slipped to 2,449.84 metric tons yesterday, about seven percent below a record in December, according to data compiled by Bloomberg.
Silver for immediate delivery rose 0.4 percent to $28.4613 an ounce, paring a second quarterly decline. Spot platinum traded little changed at $1,571.50 an ounce. Palladium was at $772 an ounce, set for a third straight quarterly gain.