Monday, March 18, 2013 5:30 pm
Cyprus bailout worries push investors into gold
By The Associated Press
Gold for April delivery rose $12, nearly 1 percent, to $1,604.60 per ounce.
News about Europe's bailout plan for cash-strapped Cyprus unsettled many investors, and all three major U.S. stock indexes lost ground. Traders were surprised that the bailout plan included slapping a tax on deposits in the country's banks - essentially forcing anyone who keeps money in a Cypriot bank to take a "haircut," or a loss.
Edward Lashinski, at RBC Capital Markets' futures group, said investors were worried about a run on Cypriot banks, and whether Europe would impose similar requirements on other struggling countries in the region. They saw gold as a safer bet, he said, because "it's hard to haircut gold."
May silver inched slightly higher, up 2.3 cents to $28.874 per ounce.
Industrial metals were a different story, with copper falling more than 2 percent and palladium more than 1 percent. Investors generally push down prices of industrial metals when they are worried about an economic slowdown, since there's less need for materials required in manufacturing.
A slowing economy in China, the world's second-largest, has hurt prices for industrial metals, Lashinski said. On Monday, an unexpected drop in homebuilder confidence didn't help either. The National Association of Home Builders/Wells Fargo builder sentiment index fell over the month, with measures of customer traffic and current sales conditions both declining from February.
"My view is, how much further can housing recover with unemployment close to 8 percent still?" Lashinski said.
May copper fell 9.25 cents to $3.428 per pound. June palladium fell $10.80 to $764.85 per ounce. April platinum was down $13.20 to $1,579.20 per ounce.
Prices for wheat and soybeans fell more than 1 percent. Wheat lost 10.25 cents to $7.1275 per bushel. Soybeans lost 16.5 cents to $14.095 per bushel.
The price of corn was up slightly. It rose 3 cents to $7.20 per bushel.
Benchmark oil for April delivery rose 29 cents to $93.74 a barrel, after dropping as low as $91.76 earlier in the day.
Brent crude, used to price many kinds of oil imported by U.S. refineries, went the opposite direction, falling 31 cents to $109.51 per barrel in London.
In other energy trading, natural gas rose 1 cent to $3.88 per 1,000 cubic feet. Wholesale gasoline lost 3 cents to $3.13 a gallon. Heating oil fell 1 cent to $2.93 a gallon.