The gold price has breached $1,600 which can only be a positive...

The gold price has breached $1,600 which can only be a positive for gold and gold stocks. But for all gold stocks? For efficient producers- yes.For explorers-perhaps, and for emerging producers like MYG - a closer look is in order.

With the Cyprus "bomb shell" coming out of the blue today,I would feel more comfortable if we already had finance in place, rather than still be waiting for it. I see this now more of an Achilles heel than before. A lot will depend on how the Cypriots as a whole react when normal business resumes on Wednesday.Will they do as they are told and accept the levy like tame bunnies, or will they go feral,take to the streets causing a breakdown of law and order.Considering that the Communist party is dead against the imposition, and with 19 seats having considerable clout, rioting is a distinct possibility.

Should this eventuate and the Govt.plus the EU authorities have the means to contain this ....well and good. However sentiment is a powerful and uncontrollable beast. Should this turn into a contagion with a run on the banks in vulnerable places like Spain and Italy for starters, with escalating bank failures plus the withdrawal of govt. deposit guarantees things could get ugly.

And possibly ugly for us. Why? In this Depression causing scenario all bets would be off. Bank lending criteria would be toughened to the point whereby bank lending might come to virtual standstill That could leave us in the situation with gold in the ground but no money to dig it up,leaving us moribund unless the gold price went up into orbit, then one way or another a way would be found to mine it.

This may sound rather alarmist which it could well be and I hope for all of us that it is.However the point which I have tried to make is that a rising gold price, though welcome, in these circumstances could turn out to be a two edged sword.I really hope that all the above turns out to be completely
erroneous, but I would feel much more re-assured if finance was in place now, rather than still chasing it.