Daily Market Report 3/25/13

GOLD
Cyprus reached an eleventh-hour €10bn bailout deal with international lenders this morning that avoids a controversial levy on bank accounts, but will force large losses on big deposits in the island’s two largest lenders. The deal will allow the European Central Bank to keep its emergency lifeline open to Cypriot banks on Monday, preventing a meltdown of the financial sector that threatened the country’s Euro membership. The deal was reached today in the early hours, after a stormy meeting of 17 Eurozone finance ministers that lasted almost 12 hours and included a threat by the Cypriot president to pull his country out of the Euro. The plan does not need approval from the Cypriot parliament because the losses on large depositors will be achieved through a restructuring of the island’s two largest banks, not a tax. The parliament passed a new law governing bank failure just three days ago at Brussels’ urging.

After the above Eurozone announcement was made, the Euro weakened versus the U.S. Dollar; with a strong U.S. Dollar, Gold declined. At one point this morning Gold reached $1,588 before sizeable buying appeared. Gold quickly rallied back to $1,608 and showed a little resistance at that level.  At 11am PDT today, Gold is trading at $1,603 per ounce, down $4.60 on very heavy volume.

SILVER
Silver has stayed between $28.50 and $28.98 all day, with heavy selling at the $29 per ounce resistance level. At 11am PDT today, Silver is up $0.04 per ounce, trading at $28.82 per ounce on light trading.