Gold & Silver Daily Market Recap: March 18th,2013 | Cache Metals

Gold & Silver Daily Market Recap: March 18th,2013

Trouble in the Eurozone has reared its ugly head. Traders were sellers of the euro dollar as flight to gold was on the table as Cyprus is considering a tax on bank deposits to pay for a bailout.

Spot gold finally surpassed the $1600 level as traders dumped equities in favour of the yellow metal. The European Union declared that Cyprus must levy 5.8 billion euros from citizens’ bank accounts to contribute to the 17-billion-euro banking bailout this news took investors by surprise. On Friday, President Nicos Anastasiades proposed a plan which would see lawmakers impose a 6.75 per cent tax on all bank deposits for accounts with under 100,000 euros in assets. Accounts with more than €100,000 would see a 9.9 per cent tax. Monday was a bank holiday in Cyprus the timing of announcement  was tailored to allow Cypriots time to digest, but this wasn't the case as Cypriots spent the weekend withdrawing funds at bank machines throughout the country. This type of contagion could spread through all of Europe as now other countries are fearful that the EU could impose similar sanctions.

“This is nothing short of astounding. This is the news of the year to date economically and the repercussions of this decision are going to reverberate for days, weeks, months and years into the future. The very nature of banking has been shaken to its roots with this decision, for banking depends upon the trust that bank officials will always treat deposit as sacrosanct. Trust runs to the very core of money and banking and trust has now been shattered, torn asunder, broken and destroyed.” Said Dennis Gartman of the Gartman letter

will see how this whole episode shakes out but as it stands now the Euro dollar against all major currencies is being aggressively sold. With this latest development gold should become well bid if a resolution isn't reached by week's end.
In the U.S it will be a busy week for data as first up was the NAHB Housing Market index, the index fell to its lowest reading since October 2012 of 44 from 46 last month, coming well under the predicted rise to 48.This data continues the theme of an increasingly negative outlook for the US housing market.  Due up tomorrow is  New Home Sales and Existing Home Sales on Thursday. The Federal Open Market Committee is due to deliver an update on monetary policy and also economic forecasts due Tuesday and Wednesday. The central bank is expected to hold the line on interest rates and its quantitative easing programmes but market participants will most certainly dissect the Fed statement for hints on futures monetary policies. Thursday as brings the Weekly Jobless claims and whether it can continue to show improvements in the labour force.

Spot silver has underwhelmed on the bullish Cyprus news as traders have focused on flight to safety. The dual role metal seems to be trading like a commodity again as with a flat Dow Jones Industrial average the metal remains subdued. Silver traded to a modest high of $29.08 mostly trading unchanged on the day.

  Gold Silver
Support $1575/$1585 $28.30/$28.77
Resistance $1610/$1625 $29.30/$29.95


March 18th Closing Prices

Gold $1605
Silver $28.84
Platinum $1578
Palladium $763






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