Gold & Silver Daily Market Recap: March 22nd,2013

The precious metals market remains jittery as the situation in Cyprus is coming into its final hours. Spot gold lost $12 to trade to $1604, while silver moved lower to $28.54.

The situation in Cyprus remains a height of concern as lawmakers are now debating their next move after rejecting controversial bank deposit levy earlier in the week that was a main condition of a 10-billion-euro bailout needed to avoid financial meltdown in the country. Cyprus went to Russia to secure what they thought would have been a bailout But plans fell through with Russia with finance minister Michalis Sarris reportedly telling journalists: "I think we are not able to get the support that we wanted to get". If a deal is not reached before March 25th it could lead to financial chaos across all markets.

In the U.S it was quiet on the data front as it was a busy beginning of the week with U.S data. On march 20th the Federal Open Market Committee concluded their 2 day meeting. The Fed announced no change to the 0 to 0.25% Fed Funds target rate as well as the $85 billion a month asset purchase program. The Fed did acknowledge some moderate improvement in the economy and lowered slightly its projection for the unemployment rate in December 2013 to 7.3 to 7.5%, this target is far below the Feds 6.5% unemployment rate.

With the tenuous situation in Cyprus ongoing expect spot gold to be well bid in the range of $1600-$1620. The physical demand remains elevated which has contributed to the metal being well bid. Also of note is the wedding season in India which begins in July.

Spot silver falling gold lower but in a more dramatic way dropping 50 cents as traders squared position ahead of the weekend. At this point spot silver has lagged its bigger brother gold the main reason for this is the simple fact that at this point gold is a safe haven play while silver remains largely an industrial play. Expect silver to become bullish on a close above $29.30.