GOLD PRICE NEWS – The gold price gained ground Tuesday, rising $7.00 to $1,613 per ounce despite strength in the U.S. dollar against its foreign counterparts. Gains in the price of gold came as the U.S. dollar traded to its highest level versus the euro in 2013. Gold prices continued their rally on the back of news that Cypriot President Anastasiades agreed to support a proposed tax on bank deposits of $7.5 billion. Despite reports that Cypriot legislators were backtracking on the plan, the mere possibility of such a tax rattled markets.
CIBC World Markets noted that Cypriot authorities were working “to renegotiate the terms of a €10B bailout, attempting to scrap its levy on small account holders and instead seizing more from larger depositors and businesses.” CIBC’s research team highlighted “the large stake Russia has as a major creditor to Cyprus and will likely be involved in an alternative solution.” Instability with respect to the banking system in Europe has supported gold prices in recent days and weighed on global equity markets.