Gold price defies firm dollar as Cyprus fallout supports

Gold was little changed at $1,604.91 an ounce by 0025 GMT. Gold was on track to rise about 1.6 percent in March,which would be its first monthly gain after posting losses in the last five months.

U.S. gold for April was at $1,604.80 an ounce,down $1.40.

The euro languished at four-month lows early in Asia on Thursday,having suffered a further setback as a rise in Italy’s funding costs weighed on markets already fretting about Cyprus’ rescue deal.

Cypriots are expected to descend in their thousands on Thursday on banks,which reopen with tight controls imposed on transactions to prevent fleeing depositors from cleaning out the vaults in a catastrophic bank run.

Italy paid more to borrow over five years than it has since October at an auction on Wednesday as lack of progress in forming a new government and worries about Cyprus’s bailout hit demand,although 10-year costs fell.

The U.S. Federal Reserve would do best to keep buying assets at its current $85-billion-a-month pace until the jobs market is on firmer ground,a point that probably won’t be reached until the end of the year,a top Fed official said on Wednesday.

MARKET NEWS

Asian shares eased and the euro remained under pressure on Thursday as investors fretted over the euro zone after a weak debt auction in Italy and the potential for a run on Cyprus’s banks when they reopen later in the day.

U.S. crude futures hovered above $96 a barrel early on Thursday as markets awaited the reopening of banks in Cyprus to an expected flood of depositors after a harsh rescue deal to avert financial collapse.