Cyrpus Clinches Bailout Deal, Gold Price Dips

Cyprus clinched a last-ditch deal with international lenders to shut down its second-largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians, in return for a 10 billion euro ($13 billion) bailout. That piece of so called "good" news caused Gold Price to dip below RM160/gram barrier for the first time. 

Gold price fell to a low of RM157/gram before making recovery to RM159.89/gram as of writing. Gold investors banking on the collapse of the Cyprus bailout were left disappointed as the previous one week gain in gold price were wiped out within a day. 

With the Cyprus crisis temporarily averted, there is not much action to be seen from gold. Overall outlook of gold price remains uncertain and could stagnate at this price range for the next couple of months unless some unfavorable data are released by the Feds or another Euro country springs a  debt crisis surprise.

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22 March 2013 - Cyprus Crisis Will Continue To Push Gold Price Up

There's no firm decision yet on what is the solution to prevent Cyprus from going into bankruptcy. Lawmakers at Cyprus had on Tuesday voted out the option of taxation of bank savings in order to generate the 5.8 billion euro required to trigger the 10 billion euro emergency funds from European Central Bank. 

Banks in Cyprus have remain closed since Monday to prevent panic withdrawal and ATM's are only allowed to dispense limited cash per person, per day. The worry on the Cyprus crisis is highlighted by this statement from Stephane Ekolo, chief European strategist at Market Securities, London;

Due to the ongoing Cyprus issue, gold price has stayed above the RM160/gram level since Monday. If the situation at Cyprus is resolved, gold price should remain stagnant at this range. On the other hand if the crisis is unresolved, investors will turn to gold at that should see the price of gold breaking the RM162/gram barrier.

Some key financial data as of 22 March 2013 to share:

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