The gold price initially fell well below the $1,600 per troy ounce mark yesterday after the last-minute Cyprus bailout agreement gave rise to optimism among market players. During this phase, it was the cyclical commodities – and above all crude oil and equities – that were in high demand. At just shy of $1,590 per troy ounce, the gold price hit a weekly low. Sentiment shifted during the course of trading in the afternoon, however, when the head of the Eurogroup Dijsselbloem explained that the involvement of bank deposit holders in the bailout of Cyprus banks could be seen as a model for future bailout programmes. His comments met with considerable surprise, as there had been repeated assertions of late that Cyprus is an exceptional case. The renewed delay to the reopening of banks in the Mediterranean country sparked further uncertainty. Risk aversion soared in response, which was also reflected in falling equity markets. Gold lived up to its reputation as a safe haven again in this phase, and was able to recoup some of the losses it had incurred up to that point. ETF outflows would also appear to have come to an end for the time being. In the past three days of trading, nearly three tons of gold have flowed into the ETFs. The yellow precious metal is holding its own above the psychologically important threshold of $1,600 per troy ounce this morning. In the short term, the gold price is likely to be driven largely by news of developments in Cyprus.