If on top of this, it becomes an announced fact that gold reserves will be traded for cash to pay for national debts, then gold has, overnight, become overvalued.Fastmike, interesting point. Here's more analysis of how events in Cyprus increase bearish sentiment re gold:Mike van Dulken, head of research at Accendo Markets, said gold had suffered a "three pronged attack" from a stronger US dollar on the back of speculation that the US Federal Reserve could end quantitative easing by 2014, news that Cyprus would sell its gold reserves, and recent bearish sentiment from analysts. European Central Bank president Mario Draghi cleared the way yesterday for Cyprus to sell its 13.9 tonnes of gold reserves to fund the beleaguered island’s bail-out and traders took this as a sign that he had opened the door to similar moves in the future. Portugal, which is struggling to avoid a second rescue, holds 382.5 tonnes of gold, according to the World Gold Council. Goldman Sachs advised clients in a note this week to short gold, as it lowered it 12-month forecast to $1,390 from $1,550. http://www.telegraph.co.uk/finance/personalfinance/investing...
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