Morning Gold & Silver Market Report – 3/22/2013

Geoffrey Varner

3/22/2013 8:26:00 AM

CYPRUS STILL ON UNCERTAIN FOOTING

Cypriot lawmakers are voting today on bills that would strike a deal with European partners after talks with Russia fell apart. The controversial tax on bank deposits is the key issue that parliament will debate. Banks in Cyprus reopen on Tuesday, and there is a real concern that capital will begin to flow out of the beleaguered country. The European Union issued the Cypriot parliament an ultimatum saying they need to raise 5.8 billion euros by Monday to receive their bailout package. Without the deal, Cypriot banks will be cut off from the liquidity of the European Central Bank. Bill Blain, senior fixed income broker at Mint Partners, said “Cyprus could be let go if they don't come up with a robust enough package. If they come up with something half-baked, that will be rejected and they will be let go. If they come up with something that clearly cuts higher deposits and puts money back into the banks and go about bank restructuring, that may work.”

The Gold price has been rising as the trouble in Cyprus unfolds. Safe haven buying prompted investors to push the Precious Metal to as high as $1,616.36 an ounce in overnight trading. When priced against the euro, Gold is up 2.6 percent so far this week. Shortly after hitting is high earlier, Gold began to fall. Investor sales of ETFs seem to be stronger than the fears of a Cyprus meltdown. Year to date, Gold holdings in the SPDR Gold Trust are down 9.6 percent.

At 9:23 am (EDT), the APMEX precious metals spot prices were:

• Gold, $1607.20, Down $9.10.
• Silver, $28.71, Down $0.58.
• Platinum, $1580.50, Down $1.60.
• Palladium, $752.00, Down $3.90.

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