By Nicholas Larkin - Mar 25, 2013 1:54 PM GMT+0400
Gold declined in London, following a three-week rally, as equities climbed after Cyprus agreed with euro-area finance ministers on a rescue package.
Gold advanced 1 percent last week, the most since January, as Cyprus struggled to secure a support from international creditors. The nation won a 10 billion-euro ($13 billion) bailout after agreeing late yesterday to shrink its banking system, instead of a previous demand to impose a levy on all bank accounts. Global equities reached a one-week high.
March 25 (Bloomberg) -- Mark O'Byrne, executive director of Goldcore Ltd., talks about the outlook for gold and the U.S. dollar. He speaks from Dublin with Francine Lacqua on Bloomberg Television's "On the Move." (Source: Bloomberg)
“Firmness in equity markets has reduced its appeal as an alternative asset,” Mumbai-based Kotak Commodity Services Ltd. said today in a report, referring to gold. “The Cyprus issue did give a boost to the gold price. However, there is lack of factors for a sharp and sustained rally.”
Gold for immediate delivery fell 0.4 percent to $1,602.76 an ounce by 9:42 a.m. in London. Futures for June delivery were 0.3 percent lower at $1,603.50 on the Comex in New York.
Futures trading volume was 37 percent above the average in the past 100 days for this time of day, according to data compiled by Bloomberg.
The Cyprus accord with the “troika” of the European Central Bank, the European Commission and the International Monetary Fund was ratified by finance ministers from the 17- member euro area. The agreement would make Cyprus the fifth country to tap a rescue since the euro crisis began in 2009.
Gold rallied the past 12 years in the best run in at least nine decades as nations pledged more action to bolster economic growth. Prices are down 4.3 percent this year and investors sold bullion held through exchange-traded products amid signs the U.S. economy is improving and as Federal Reserve policy makers debated the pace of stimulus.
Silver for immediate delivery was up 0.1 percent at $28.7675 an ounce in London. Palladium was little changed at $760.48 an ounce. Platinum declined 0.2 percent to $1,580.40 an ounce.
To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter atccarpenter2@bloomberg.net
