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Gold prices recovered from the minimum values session, rising at the same time above $ 1,600 an ounce, as the bad economic data for the euro area added concerns over the debt crisis in Cyprus, causing some demand for safe-haven assets. According to data from the European Commission, the level of economic confidence in the currency bloc of 17 countries has worsened in March, cutting off the recovery period, which began in November last year. Note that in the euro zone economic sentiment fell to 90, compared with 91.1 in the previous month and below the consensus forecast of 90.5. The decline was due to the decrease in all business sectors, while consumer confidence in general ostavalrs stable. The data also showed that the economic downturn continues, which increases the pressure on the European Central Bank that it has lowered interest rates. Moreover, further reduction of euro area GDP in the first quarter now looks very likely, but the outlook for the second quarter are still unclear.
Note that the precious metal is on track for the first monthly increase since October of last month, and now shows an increase of about one percent.
Economists say that the rise in gold prices above $ 1,600 contributed to many of the uncertainties in Europe in connection with the situation in Cyprus, because people do not know how the situation will develop further. However, they added that the market is now dominated by illiquidity, as many investors are waiting for the Easter holiday. Furthermore, they believe that liquidity should be back to normal next week, during which there will be a meeting the ECB.
April futures price of gold on COMEX rose to 1602.30 dollars per ounce.
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