Mid-Day Gold & Silver Market Report – 3/25/2013

Ted Prince

3/25/2013 12:00:00 PM

STOCKS CUT MORNING GAINS ON CYPRUS BAILOUT CONCERNS

The last minute bailout to keep Cyprus out of bankruptcy and in the European Union has drawn investors away from Gold toward the dollar and higher risk assets. Though the metal has been retracting recently, net long positions for Gold have increased for the second straight week. Commerzbank analysts stated, “Whereas ETF [exchange traded fund] investors had made a significant retreat from gold in recent weeks, speculative financial investors have shown greater optimism again.” As a great deal of insecurity surrounds the ordeal in Cyprus, many will seek out safe haven investments such as Gold and Silver.

Weakened confidence in Cyprus has caused U.S. stocks to return earlier gains, but not before the S&P 500 came within one point of its all time high. The tiny island nation, with the eurozone’s third smallest economy, received a 10 billion euro ($13 billion) bailout today, promising to significantly shrink its banking system. Measures taken to keep Cyprus afloat have worried investors who are concerned about the way their private bank accounts will be handled in the event of future economic turmoil. “Despite a deal being struck for Cyprus, it will set an unsettling precedent for future bailouts and investors will once again be concerned over the security of their bank deposits,” Interactive Investor’s Head of Derivatives Mike McCudden wrote.

At 1:00 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1605.10, Down $3.50.
• Silver, $28.88, Up $0.12.
• Platinum, $1582.60, Down $1.10.
• Palladium, $756.80, Down $3.80.

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