PRECIOUS-Gold holds firm after Cyprus parliament rejects tax
* Gold eases off 3-wk high at $1,615.16/oz after Cyprus vote * SPDR Gold Trust posts biggest daily loss in nearly a month * European car sales drop 10 pct in February, hurting platinum * Coming up: FOMC policy statement, Bernanke press conference Wed. (Updates with closing prices, releads, adds Cyprus vote, rewrites throughout, changes byline, dateline) By Carole Vaporean NEW YORK, March 19 (Reuters) - Gold stayed strong on Tuesday, but eased off earlier 3-week highs above $1,615 an ounce after Cyprus' parliament rejected a tax on bank deposits which cast doubt on the country's bailout package, affirming a need for flight-to-safety buying. Cypriot lawmakers overwhelmingly rejected a deeply unpopular plan to tax bank deposits on Tuesday, throwing into doubt an international bailout for the troubled euro zone member needed to avert default and a banking collapse. Gold edged off its highs just after vote, but the lingering uncertainty surrounding Europe's financial stability should keep prices supported. "They rejected this version of the plan, but presumably there will be something else forthcoming. So, the genie is still out of the box in that your bank account is not necessarily secure and that is broadly supportive of gold," said Peter Buchanan, commodity analyst at CIBC World Markets, Toronto. Spot gold held onto gains of 0.44 percent at $1,611.90 an ounce by 1540 EDT/1940 GMT, but pulled off its highest levels since Feb. 26 at $1,615.16 an ounce reached before the Cypriot vote was cast. U.S. gold futures for April delivery settled $6.70 an ounce higher at $1,611.30, but was quoted at $1,609.50 in after hours trade following the vote. In euro terms, gold rose to its highest since Feb. 07 at 1,256.50 in early trade. The euro zone proposal, unveiled at the weekend, to partially fund a bailout of the island by taxing bank deposits rattled financial markets and pushed risk averse investors into gold as a safe haven and kept them there following the vote. "If you're worried about the value of your savings account and whether someone's going to pare it unilaterally that makes gold more appealing. We do know some of those accounts are held by people who might well consider gold as an alternative investment," said Buchanan. Cyprus' financial troubles should provide gold an underpinning, aided by the euro's bounce after the news. The euro cut its losses against the dollar in late afternoon trade, following comments that the European Central Bank took note of the Cyprus vote and that it reaffirmed its commitment to provide liquidity as needed within its rules. Gold tends to benefit from rising risk aversion if investors choose the metal as a safe store of value, it has also moved closely in line with stocks and the euro this year. INVESTMENT INTEREST MUTED Some investors also held onto gold in anticipation of Wednesday's policy statement from the Federal Reserve's Open Market Committee. They will also be anxiously watching Fed Chairman Ben Bernanke's press conference after the meeting, which could affect prices if he even hints at a policy shift. Speculation that the Fed could withdraw from its monetary easing policy known as quantitative easing, or QE, sooner than expected has pressured gold this year. HSBC said in a note that it expects the FOMC to reaffirm its commitment to its easy policy, "and to offer no hint that it will alter the policy in the near term." It added, however, that the FOMC "may decide to update its strategy principles of how to 'exit' from QE at the coming meeting. Selling from gold-backed exchange-traded funds continued on Monday, with the largest, New York's SPDR Gold, reporting its biggest outflow in nearly a month, of 13.5 tonnes. That brought its total outflow this year to 131 tonnes. Silver also reversed earlier losses and was nearly even at $28.85 an ounce. Platinum was down 1.6 percent at $1,552.25 an ounce and palladium was off 4.0 percent at $731.75 an ounce. Platinum, chiefly used in autocatalysts, has traded at a discount to gold for much of the last year, but reversed that trend in the first quarter on growing optimism that steadier global growth would translate into a demand recovery. However, car makers struggled in Europe, a key market for platinum-heavy diesel catalysts. Europe's car market shrank 10.2 percent in February, with sales of new vehicles falling to 829,359, according to figures from the Association of European Car Manufacturers. 2:53 PM EDT LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold APR 1611.30 6.70 0.4 1599.00 1615.00 149,614 US Silver MAY 28.843 -0.031 -0.1 28.620 29.090 30,785 US Plat APR 1555.40 -23.80 -1.5 1549.80 1584.90 20,989 US Pall JUN 735.20 -29.65 -3.9 727.30 766.65 8,239 Gold 1610.85 6.05 0.4 1600.75 1615.16 Silver 28.850 0.010 0.0 28.680 29.080 Platinum 1552.25 -24.50 -1.6 1552.50 1583.00 Palladium 731.75 -30.75 -4.0 729.77 763.50 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 184,857 174,963 13.66 -0.10 US Silver 32,779 52,746 20.92 -1.06 US Platinum 30,117 10,829 18.03 0.14 US Palladium 8,335 5,242 (Additional reporting by Clara Denina and Jan Harvey; Editing by Keiron Henderson, Grant McCool and Gunna Dickson)
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DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.
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