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Gold Bounces Back Amid Cyprus Concerns, Bolstered by Asian Buying

April 17, 2013 10:13 AM EDT
iShares Gold Trust (NYSE: IAU) and SPDR Gold Trust (NYSE: GLD) are ticking higher Wednesday following weakness that less to the largest dip in gold since 1983.

June contracts are up modestly to $1,387 per ounce on the Comex, potentially attracting back some buyers who were on the sidelines through gold's descent. Futures hit $1,321.35 on Tuesday, the lowest level seen since January 2011.

Overall, gold is down 18 percent in 2013.

The drop was bolstered as Cyprus is looking to unload part of its gold reserves in the next few months, which will need to be approved by central bank president Panicos Demetriades. Cyprus must come up with about €11 billion in new funds to meet requirements needed for a €10 billion capital infusion from the IMF. Gold sales are one option, though a bank tax and other taxes are likely to be implemented.

The World Gold Council pegs Cypriot gold holdings at 13.9 metric tons.

Reuters noted Wednesday that buying in Singapore pushed prices on gold bars at $1.70 per ounce to spot London prices, though demand in India still remains absent.

Holdings in the SPDR Gold Trust eased 0.7 percent to 1,145.92 tonnes, from 1,154.34 tonnes on Monday.


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