Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold finished virtually flat, dipping 0.1% in a volatile session, after the last-minute deal to avert default in Cyprus first reduced and then increased safe-haven pressure. In order to qualify for a $13 billion bailout from international lenders, Cyprus agreed to confiscate 4.2 billion euros from bank deposits exceeding 100,000 euros. Initially, the markets applauded the deal as preventing the collapse of the Cypriot banking system and possible spread of debt-contagion. Equities rallied as risk-appetite returned, and gold fell to $1,582.

Sentiment sharply reversed itself, however, after Jeroen Dijsselbloem, chairman of the eurozone finance ministers, said the Cyprus deal may become the template for future eurozone bailouts, thereby putting large bank deposits at risk throughout the region. In addition, Moody�s rating service wrote that Cyprus remains at risk of default and euro-expulsion despite the bailout. Equities quickly tumbled and gold climbed back above $1,600 as spooked investors sought wealth-protection. Silver gained 0.4% and platinum added 0.1% while palladium retreated by 0.6%.

At the Comex close: April gold dipped $1.60 to $1,604.50; May silver added 12 cents, to $28.82; April platinum rose $1.20 to $1,582.90; and June palladium dropped $4.20 to $757.35 an ounce.

Highlighted by the unfolding fiasco in Cyprus, Europe�s problems are driving large-scale speculators into extreme bullishness on gold. Bloomberg reported today that bullish bets by hedge funds increased by 63% to more than 70,000 contracts, the biggest expansion since 2008.