Gold prices held on the upside momentum, asturmoil in Cyprus has reinforced the safe havenappetite. The yellow metal is consistently trading above US$1,600/ounce for the past few days,which is an encouraging sign for the gold bugs.European Central Bank has warned it would withdraw the liquidity lifeline to the nation’s banksif it failsto reach a deal with the European Union and International Monetary Fund by 25thMarch. Meanwhile, Standard & Poor's late has cut its rating on Cyprus one notch further into junk territory on account of looming problems with the national banks.
On currency front, euro fell to four month low against US dollar. Poor macroeconomic landscape in the region also took a toll on the currency. Germany’s manufacturing sector unexpectedly contracted in March. In this respect, the country’s preliminary manufacturing PMI dropped to a three‐month low of 48.9. A reading below 50 denotes contraction. Meanwhile, a gauge of euro‐area services and manufacturing output also contracted more than expected.
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