Gold prices climbed back over $1,600 an ounce on Monday as fears over a controversial levy on bank deposits in Cyprus bought Europe’s debt crisis back into clear focus.

SPDR Gold Shares (NYSEArca: GLD) rose 1% in afternoon trading. The bullion-backed ETF has gained ground the past two weeks after trending lower since October 2012.

GLD and other gold ETFs saw a record reduction in their bullion holdings in February, but the outflows have slowed more recently.

“The gold price has been capped by selling by investors liquidating their gold ETF holdings. In the week to March 14, gold ETF holdings fell by 330,000 ounces to 83.9m ounces, according to UBS. The most popular SPDR holdings saw liquidations at 217,000 ounces,” the Financial Times reports. “Nevertheless, ETF-related selling had slowed substantially. The final week in February saw 996,000 ounces of gold liquidated followed by 641,000 ounces last week, said Standard Bank.”

“We believe that the ETF liquidation will stop,” said Standard Bank analyst Walter de Wet.

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