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Gold bugs are back ... sort of

March 18, 2013: 1:23 PM ET

Gold prices are rising as uncertainty about Cyprus sparks a flight to safety.

Gold is making a comeback, at least for today.

The precious metal shot above $1,600 an ounce Monday, as rattled investors looked for safe spots to park off while Cyprus sorts out its banking issues. Over the weekend, it seemed like the tiny nation was going to get its 10 billion euro bailout and it would be business as usual.

But then the strings were attached, in the form of a tax on all bank deposits. That caused Cypriots to swarm ATM's in an effort to pull their money out before the tax went into effect.

Banks will stay closed through Wednesday and the Cypriot Parliament won't take up the bailout issue until Tuesday at the earliest.

Related: 5 reasons Cyprus bailout matters

The proposed move sparked fear around global markets, sparking a sell-off in European and Asian stocks. The euro fell as low as $1.288 -- its lowest since November.

In turn, gold drew buyers. Gold had already started to trend higher before worries about Europe reared their ugly head. But $1,600 still appears to be a resistance point for investors.

At the same time, the SPDR Gold Shares Trust (GLD) ETF jumped more than 1%. Gold miners also got a boost. Shares of Randgold (GOLD) and Eldorado Gold Corp. (EGO) gained more than 2%.

All of that provided fodder for StockTwits traders Monday.

$GLD is reacting as a hedge against fiat currency cause ECB #CYPRUS thinks its ok to levy against Savers #deposits.

$SI_F Public will surge into silver and gold $GLD $SLV .It doesn't matter if seizure plan is reversed,because we ALL now know it is possible Bullish

Well, really, anything is possible. But gold has been tried and true as a safety play time and time again. One thing to note here. Gold is up but it's not in a sky-high rally, which suggests to me, at least, that there are some skeptics out there.

Mentioned last week, $GLD consensus % bulls is only 43%. Near last May lows and 4 yr lows.

Thank you RyanDetrick for proving my point. Only 43% bulls mean the rest are more bearish.

Gold hanging near highs, keep your eye on it, it's a mover $GLD $GC_F

It was a mover. For now, gold seems to be holding steady right around $1,600.

$GLD.... weakness in gold should be seen as risk off and expected weakness in equities...not vice versa...$STUDY

Exactly! That's probably why we're seeing gold back off its earlier high.

Stocks have also started to bounce back as everyone decides it may be a little too early to call an end to the rally. Remember that the Dow has just come off its best winning streak since 1996 and hit new records for 8 days in a row.

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Catherine Tymkiw
Catherine Tymkiw
News Editor CNNMoney

Catherine Tymkiw is a news editor at CNNMoney where she helps oversee breaking news coverage and futures planning. Previously, she was the investing editor. Prior to joining CNNMoney, she was the online editor at Crain's New York Business and has nearly two decades of reporting and editing experience. She tweets @ctymkiwcnn

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