“Safe Haven Demand” for Gold Seen Amid Fresh Cyprus Chaos, But #1 ETF Shrinks Again

Tuesday, March 19, 2013
By Paul Martin

Adrian Ash
GoldSeek.com
Tuesday, 19 March 2013

The GOLD PRICE continued to hold above $1600 per ounce in Asian and early London trade on Tuesday, easing back from Monday’s 3-week high as world stock markets struggled again amid fresh uncertainty and rumor over Euro-member Cyprus’ banking crisis.

Silver below $29 per ounce held flat alongside other commodities, while major-government bond prices rose.

Ahead of the US Federal Reserve’s 2-day policy meeting, 10-year Treasury yields edged down to 1.94% per year.

Consumer price inflation was reported at 2.0% on Friday.

“[The Eurozone's] long-running problems…are not going to be resolved quickly,” said New Zealand’s finance minister Bill English in an interview this morning.

“I think over the next five to seven years, you’re going to see these occasional outbreaks of [Eurozone] anxiety in quite unexpected ways.”

Following Monday’s jump in the gold price, “Whether this will be enough to push prices sustainably higher remains to be seen,” notes the latest Precious Metals Update from German refining group Heraeus.

“In the past, such measures fuelled investors’ uncertainty and gave a boost to bullion demand.”

Monday saw turnover in US gold futures contracts jump 28% from the previous week’s average, but the outstanding number of open contracts was barely changed by session’s end.

The giant SPDR Gold Shares – briefly the world’s biggest exchange-traded trust fund when Dollar gold prices peaked in late-summer 2011 – saw yet another outflow from its holdings, down for the 32nd time this year to a 20-month low beneath 1,220 tonnes.

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