“Gold fell, ending a three-day advance in New York, as a strengthening dollar curbed demand for an alternative investment.
Gold jumped yesterday after Cypriot President Nicos Anastasiades bowed to demands to raise 5.8 billion euros ($7.5 billion) through a proposed tax on bank deposits. Defence Minister Fotis Fotiou said Cyprus’s parliament may not vote on a levy again today. The dollar was little changed versus the euro after yesterday reaching the highest since December. The Federal Reserve begins a two-day policy meeting today.
“The U.S. dollar is firming, which is a bit negative for precious metals,” Peter Fertig, the owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said today by phone. “There’s still good reasons to hold gold.”
Gold futures for April delivery fell 0.1 percent to $1,602.50 an ounce by 7:47 a.m. on the Comex in New York. Prices fell as much as 0.3 percent today after reaching $1,610.40 yesterday, the highest since Feb. 27. Futures trading volume was 34 percent below the average in the past 100 days for this time of day. Gold for immediate delivery declined 0.1 percent at $1,603.69 in London.
The proposed bank-deposit levy, announced March 16, sparked concern among investors about setting a precedent by breaking the taboo against raiding bank accounts. Fotiou said the government was working on a “Plan B” if the vote isn’t passed in parliament. Banks and stock markets in Cyprus are closed today and tomorrow.
Gold’s Drop
Gold is down 4.4 percent this year amid signs the U.S. economy is improving and as Fed policy makers remain divided on the pace of stimulus that helped prices rally for a 12th straight year last year. Holdings in the SPDR Gold Trust, the biggest bullion ETP, fell to 1,219.5 metric tons yesterday, the lowest since July 2011, data on its website show….”
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