When the full extent of the horror show that is the final solution to the Cyprus problem finally hit the newswires, the Euro exploded to the downside taking gold and silver with it.  The problem, of course, is that Cyprus might not even be fixed, just like Greece was never fixed.   Moody’s is convinced it’s still not over and sees a significant chance that Cyprus has to leave the Euro anyway.  If that happens I think we’ll just be able to start calling it the Zombie Bailout.

Gold and silver both recovered on very strong volume as we closeout the April futures contracts.  Tomorrow begins the delivery period for the April contract and there was a lot of open interest as of Monday night.  We’ll see how much of it is still there to take delivery and what that does to the price going forward.

If tomorrow’s U.S. GDP number is bad and the unemployment data bad alongside it that may finally be the impetus to see a 1% to 2% day in Gold.  But, it will be fought bitterly and expect the noise out of Europe tonight to push the price as low as possible before that happens.

With all of the instability created by Cyprus it is becoming more and more obvious that chaos and fear is what is begin engineered here.  I didn’t want to believe that they would be that stupid as to try to scare the money out of the banks to get money flowing, but that is becoming more and more the most likely reason for why they chose to push these buttons now over Cyprus.