Gold price drops on Cyprus sell off news

The price of gold fell by over one per cent on the back of the news the Cyprus government is considering selling off its reserves to boost the nation's financial plight.

Its value dropped to $1,557 (£1,012) on revelations Cyprus will have to offload some 10 tonnes – or as much as €400 million – of the precious metal to improve its finances under the terms of its recent bailout deal.

Cyprus has been told by the rest of Europe that it is going to have to stump up €13 billion towards filling the €23 million hole in its finances, with the government revealing it is considering a range of other options, as well as the sale of its gold reserves.

According to a report by This is Money, the sale of the Cyprus gold reserves would amount to the biggest eurozone bullion sale in four years if it goes ahead.

A gold trader told the Bullion Desk earlier in the week that gold prices appear to be "stuck". The value of the precious metal has been slowly sliding since the start of the year.

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