Gold drops to 2 year low

Markets opened with pressure to the downside for stocks.  But, the big news has to do with gold dropping to its 2 year low.  Not only the 2 year low, but its biggest 2 day drop in 30 years.  The cause? The country of Cyprus may sell 400 million euro’s worth of gold to keep its head above water.  But the real worry is that other European countries could follow their lead, and that would result in the gold market burdened by supply.  mortgage bonds are higher, but only slightly.  Their price level is now approaching the April 5th high, an area that resulted in a quick 100 basis point loss within a few days.  We will suggest a very cautious floating bias as long as pressure remains on stocks.

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