Gold Prices Slips But Above $1,600; Silver Prices Up

Gold prices eased during Asian trading hours on Thursday but remained above $1,600 an ounce level as investors are still edgy over the Cypriot bailout deal, fearing that harsh penalty imposed on bank depositors in lieu of the financial aid, might serve as a template in future rescues in the currency bloc. Silver prices, meanwhile, edged higher in early trading on Thursday.

At last check, U.S. gold futures for April delivery slipped 0.10% to $1,605.60 an ounce while spot gold inched up 0.04% to $1,605.36 an ounce.

Simmering concerns over the state of health of the euro zone economy helped the metal to recover some of its lost ground in March, after taking a pounding in first two months of the year. A data provided by Reuters showed that the gold is on course to post 1.6% monthly gain, a first monthly gain in last six months.

Even though the Cypriot government and policymakers from the EU prevented the financial meltdown in the island economy by entering into a last-minute deal on Monday, market participants are worried about the manner in which the international lenders agreed to release the financial package.

There are concerns that should international lenders adopt the same policy (heavily taxing depositors) towards a larger economy in exchange of financial aid then it could trigger bank runs.

On Thursday, banks in Cyprus are likely to reopen and hundreds of depositors are expected to scramble towards the bank.

In a note to clients, Edward Meir, metals analyst at futures brokerage INTL FCStone, said, “”We continue to maintain the short-term outlook out of Europe remains uncertain enough to give the gold market a degree of support for the balance of the week and heading into early next week,” according to Reuters.

“Although the Cypriot situation will likely fade from the headlines over the course of the next month, the unusual circumstances behind the country’s rescue will likely linger for some time longer,” added Meir.

Silver futures gained 0.29% to $28.695 an ounce.

In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was up 0.04%, and the ProShares Ultra Silver (ETF) (NYSE: AGQ) was up 0.18%.

More Posts by this author

• U.S. Stocks Trade Higher
• Stocks Edge Higher in Early Trading
• Forex Market Update: Yen Inches Up Against Dollar, Euro Falls
• Gold Prices Slid, Silver Prices Slip as Well
• Stock Futures Edge Higher
• Shoe Carnival Reports Q4 Results (SCVL)
• Urban Outfitters Expect High Single Digit Comparable-Store Sales for Q1, Shares Jump in Afterhours Trading

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.