Two stories took most of the headlines this week, and they were a sticky bailout situation going on in Cyprus as well as a meeting involving the Federal Reserve. The Open Market Committee meeting brought with it, as it usually does, plenty of speculation that ended up being only that. Cyprus, a financially failing nation in Europe in need of a bailout had a lot to deal with this whole past week.
Cypriot Bailout Woes
It is no secret that there is more than a handful of nations in need of financial assistance in the European region, and believe it or not Cyprus is arguably one of the most needy of the bunch. Because of this the tandem of the IMF and the EU have been working to plot a sensible bailout of the small island economy.
The first proposal set forth by the two organizations involved a requirement that said if they were to receive a bailout, it would be at least partially funded by private bank accounts within the nation. This news obviously enraged many Cypriots which led to large groups going to ATMs and withdrawing all of their funds. Eventually this action caused most ATMs to run out of cash and forced the government of Cyprus to call for a bank holiday which has lasted all week. This news helped gold and silver because any time people are unsure of their paper money, they turn it into solid, precious metals.
Federal Reserve Meeting Sparks Speculation
The Federal Reserve had a meeting this week and to make a long story short, nothing is changing as far as monetary policy in the US is concerned. While this is now a fact, many people began to speculate to the contrary before the meeting even happened.
The meeting confirmed that monetary policy would not change and at the end of the day most precious metals investors were fairly happy about that news. The meeting, on the whole, did a decent job of helping both gold and silver.
The Week Ahead
The main focus on everyone’s mind this upcoming week will be the situation going on in Cyprus. Not many people were aware of their dire need for money but now that the story has been thrust into the spotlight it has grabbed the attention of the world. It will also be interesting to see if any more positive economic news will stem from the United States.
Weekly Shift
Silver had started the week at about $28.85 and by the time markets closed on Friday it finished just about the same way it started. Gold started the week at $1,598 and ended the week at $1,609 picking up about $11.