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Gold Falls As Cyprus Crisis Fadesby Peter A. Grant
Apr 02, AM 
Gold is under pressure, falling deeper into the range as the Cyprus debacle fades into the background and firming stocks continue to attract capital flows. The yellow metal has fallen to new two-week lows below 1589.55.Cypriot finance minister Michael Sarris resigned today amid an ongoing investigation into the causes of the financial crisis. Sarris himself is under scrutiny, so this move was widely anticipated. Talks with the troika have concluded and bailout funds are now slated to begin flowing in May. Meanwhile, the ceiling for bank transactions requiring central bank approval has been raised to €25k, from €5k previously. While the easing of a capital control is being viewed as a signal the overall crisis is easing, most capital controls remain in place and are in fact expected to remain in place for some time to come. Nonetheless, the general sense is that Europe has dodged yet another bullet. European stocks firmed and U.S. stocks are following suit, with the DJIA setting a new record high. As equity markets continue to rise, they are drawing investors out of their safe haven assets into riskier investments. With yields on deposits artificially suppressed as a result of aggressive monetary policy, investors are being pushed out along the risk curve in a quest for yield above the present rate of inflation. See Michael Kosares' recent examination of real rate of return in Wealth won, wealth lost. NEWSLETTER SIGN-UP Opinions expressed in commentary on the USAGOLD.com website do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. USAGOLD, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD does not warrant or guarantee the accuracy, timeliness or completeness of the information found here. |
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