Gold Climbs Above $1,600 as Cyprus Turmoil Spurs Haven Demand

              Gold climbed above $1,600 an ounce as outrage in Cyprus over an unprecedented levy on bank deposits threatened to derail the nation’s bailout and spark a new round in Europe’s debt crisis, boosting demand for haven assets.

Gold for immediate delivery gained as much as 1.1 percent to $1,608.60 an ounce, the highest since Feb. 27, and traded at $1,604.38 at 7:03 a.m. in Singapore. Bullion for April delivery rose as much as 0.9 percent to $1,607.60 on the Comex.

Cypriot President Nicos Anastasiades bowed to demands by euro-area finance ministers to raise 5.8 billion euros ($7.5 billion) by taking a piece of every bank account in Cyprus. Scenes of Cypriots lining up at cash machines raised the specter of capital flight elsewhere and threatened to disrupt a market calm that settled over the 17-member bloc since the European Central Bank’s pledge in September to backstop troubled nations’ debt.

“Cyprus has put a little bit of a spin back towards safe- haven assets, purely as a result of a little bit of nervousness coming back into Europe,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney.

Silver for immediate delivery climbed as much as 1.3 percent to $29.135 an ounce and was at $29.006. Platinum rose 0.3 percent to $1,594.25 an ounce, while palladium declined 0.2 percent to $774.75 an ounce. (Source : Bloomberg)