WASHINGTON (dpa-AFX) - Gold futures settled higher for a fourth straight day Tuesday, as investors continued to seek the safe haven appeal of the precious metal with increased anxiety over the upcoming vote in the Cyprus parliament on the bailout package from international lenders. The aid package includes a controversial proposal to tax deposits in Cyprus banks, which may also signal the beginning of similar imposition on aid sought by other nations.
The Cyprus parliament is set to vote later today on the bailout terms that is a part of aid package, after postponing it twice in the last two days. A temporary bank holiday was declared in Cyprus on March 19 and 20 to avoid a bank run. Eurozone finance ministers initially called for a 9.9 percent tax on bank deposits above 100,000 euros and a tax of 6.75 percent on deposits below that amount.
Gold for April delivery, the most actively traded contract, gained $6.70 or 0.4 percent to close at $1,611.30 an ounce Tuesday on the Comex division of the New York Mercantile Exchange.
Gold for April delivery scaled an intraday high of $1,615.00 and a low of $1,599.00 an ounce.
Yesterday, gold settled above the $1,600-mark for the first time in three weeks as investors sought the safe haven appeal of the precious metal after a proposed bailout package for Cyprus dampened sentiments over the already fragile eurozone economy. There were worries after it was known the Cyprus bailout proposal involved a bank-deposit tax, where depositors would have to take losses, raising fears a similar condition might be imposed on other nations seeking bailout.
German Finance Minister Wolfgang Schaeuble in an interview said depositors at Cypriot banks should contribute to the bailout fund through a bank levy, stressing that the burden of bailout should not fall on the shoulders of European taxpayers alone. The German government supports the 'bail-in' for Cyprus, with private depositors' participation.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 83.06 on Tuesday, up from 82.67 late Monday in North American trade. The dollar scaled a high of 83.10 intraday and a low of 82.62.
The euro traded lower against the dollar at $1.2867 on Tuesday, as compared to $1.2956 late Monday in North America. The euro scaled a high of $1.2969 intraday and a low of $1.2854.
In economic news from the U.S, the Commerce Department said housing starts edged up 0.8 percent to a seasonally adjusted annual rate of 917,000 in February from the revised January estimate of 910,000. Economists expected housing starts to climb to an annual rate of 915,000 from the 890,000 originally reported for the previous month. Building permits, an indicator of future housing demand, jumped 4.6 percent to an annual rate of 946,000 in January from the revised January rate of 904,000.
From Europe, U.K. inflation rose to a nine-month high, increasing as expected to 2.8 percent in February from 2.7 percent in January, the Office for National Statistics showed. On a monthly basis, consumer prices rose 0.7 percent, reversing January's 0.5 percent drop. Core inflation that excludes energy, food, alcoholic beverages and tobacco, remained unchanged at 2.3 percent.
Meanwhile, Germany's economic confidence improved for the fourth successive month in March, and exceeded economists' expectations, latest data showed. The ZEW Indicator of Economic Sentiment moved up to 48.5 points in March from 48.2 points in February, marking the fourth consecutive increase, a survey by the Center for European Economic Research/ZEW showed. The latest reading exceeded the consensus forecast of 48.1 points.
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