The main news on every investors mind this whole week was the ongoing bailout situation going on in Cyprus. Ever since last weekend, European investors as well as those who have funds in Cypriot bank accounts have had their eyes fixed on the small island nation. In addition to this, the Federal Reserve Open Market Committee had a meeting this week that many were anxiously awaiting. All in all it was an eventful and relatively positive week for precious metals.
As always, whenever the FOMC has a meeting investors pay close attention and analyze just about everything that is said, and sometimes things that aren’t even said. The atmosphere surrounding this meeting indicated that no major news would be unleashed, but this did not stop market-watchers from speculating that Quantitative Easing measures were going to be put to an end.
While there was no real evidence that QE would be ceased, some people bought into the thought nonetheless. When the meeting actually happened it lived up to expectations and there have been no alterations to the United States’ monetary policy.
Cyprus Bank Account Tax
Like most European nations, the island nation of Cyprus is in dire need of some financial assistance from both the IMF and the EU. One of the proposed plans, which was heard about roughly a week ago, suggested that the IMF and EU will pass on a bailot to Cyprus as long as some of the money paid was funded partly by private Cypriot bank accounts. This news obviously was not music to the ears of those who have money in bank accounts there which led to mass quantities of people going to ATMs to withdraw their balances.
After a while most ATMs were simply out of cash and the Cypriot government declared a bank holiday for the entirety of this week. In the end the proposed bank account taxing plan was shot down, but it did a great job of scaring people all over the world about the future of their money.
The focus for the week going forward is without a doubt the various debt situations in Europe, headlined by Cyprus. Now that the initial bailout plan was shot down, the eyes of the world will be waiting to see how Cyprus will get a bailout, as well as how it will be funded.
Gold opened the week on Monday at about $1,598 and improved by about $11 to finish the week at $1,609. Silver started the week at $28.85 and remained about even by the time the week was over.