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Commodities Brief: Gold rallies above $1.6k on risk-off Cyprus news

FXstreet.com (Barcelona) - News coming from the EU this weekend, set aside political uncertainty in Italy, have driven markets into another stage of risk-off mode, as new deal on Cyprus bail-out bites on bank depositors as a way to avoid default, which has sparkled a massive fly to USD safety, including US 10 year bonds. EUR/USD fell from 1.0375 to lowest in 3 months at 1.2887, Oil is last around $92 mark from previous $93.20, and Gold broke to fresh 3-week highs at $1608, just to give back almost all gains, last at $1595.

Not only that but Copper also had a massive sell-off last around the $3.43 level, down -2%, off fresh 7-month lows at $3.4 round, while Iron ore prices settle around the $134 level, now up +1.32% for the day, following a -15% monthly slide that led it to print fresh 2013 lows. US 10 year bond yields have slipped to 1.9% lows from highs above the 2.06% on Thursday, on the back of USD denominated treasuries demand as a safe haven move from equities that already see heavy losses in Asia with US futures at fresh session/7-day lows, Nikkei index -1.99% and Hang-Seng -1.59%.

Silver also moved higher at the weekly open but could not hold above $29 sellers, printing a fresh 3-day high at $29.15, selling off right after to fresh 2-day lows at $28.61, last at $28.78, flat for the week at the moment. Commodity currencies such as Aussie, Loonie or Kiwi have also had generous selling as USD/CAD moves above the 1.0230 mark again, and AUD/USD holds around the 1.0350 figure from previous 1.0410 weekly close.

Forex Flash: Unless bailout ratified, Cyrpus faces risk of EUR exit - RBS

The Cyprus bailout story may help keep the EUR in a recent downtrend, says Greg Gibbs, FX strategist for RBS. He says that "EUR remains essentially in a downtrend since its high on 1 Feb, it is now testing significant support around 1.288, and the lower end of a recent declining channel..."
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