Gold the lone beneficiary from Cyprus episode
Analysts said the controversial bailout plan for Cyprus threatens renewed uncertainty in the euro zone, led to buying of the safe-haven metal.
Gold remained the only major commodity that gained from the mini crisis involving island nation Cyprus.
Gold rose as much as 1.1 percent to $1,608.60 an ounce, the highest since Feb. 27.
Analysts said the controversial bailout plan for Cyprus threatens renewed uncertainty in the euro zone, led to buying of the safe-haven metal.
Global stocks fell sharply as investors fretted over a weekend plan to tax depositors in Cypriot banks as part of a bailout of the Mediterranean island nation.
The euro was taking a pounding too, down 0.7 percent at $1.2954. Though Cyprus accounts for only around 0.2 percent of the combined output of the 17 European Union countries that use the euro, the tax on depositors has stoked fears of bank runs in other troubled European economies.
Since the European debt crisis began in late 2009, savers have been spared. The bailout of Cyprus, agreed to early Saturday, foresees a 6.75 percent levy on deposits below (EURO)100,000 ($130,860) rising to 9.9 percent on those above.
People in Cyprus have reacted with fury to the news and the country's new president is apparently working out a new plan to be put to Parliament that will limit the hit on small depositors.
If Cyprus parliament agrees, the country would be eligible for a 10 billion euro financial rescue from its partners in the eurozone and the International Monetary Fund.
German finance minister Wolfgang Schaeuble said Sunday that a no vote by Cypriot lawmakers would have huge repercussions in the country.
He said bank owners and investors had to participate in the rescue. "It can't be done any other way if we want to avoid insolvency.
Cyprus' banking sector is about eight times the size of the economy and has been accused of being a hub for money-laundering, particularly from Russia. That's why many European officials wanted to have the banks' depositors involved in the cost of the bailout.
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