Daily Market Report 02/14/12

GOLD

A massive downgrade of European Sovereign Debt combined with a sizeable increase in QE in Japan caused a rally in the U.S. Dollar versus the Euro and Yen (see more information below). Initially this Dollar rally caused a selloff in Gold, driving the price down to $1,712, but the inherent strength of the metal caused fresh buying.  At 11am PST, Gold is at $1,718.40, down $4.60 on the day in heavy trading.

Moody’s Investors Service cut the debt ratings of six European countries including Italy, Spain and Portugal and said it may strip France and the U.K. of their top Aaa ratings, citing Europe’s debt crisis. Spain was downgraded to A3 from A1 yesterday, Italy to A3 from A2 and Portugal to Ba3 from Ba2, all with negative outlooks. Slovakia, Slovenia and Malta also had their ratings lowered.

The Bank of Japan pulled out most of the stops in its policy arsenal, expanding its asset-purchase program by $129 billion and also setting a clear price target in response to political pressure to strengthen its commitment to ending deflation. The central bank’s policy board said it will boost the size of its asset purchase program—the main tool for credit easing amid near zero interest rates—to ¥65 trillion ($838 billion) from ¥55 trillion, by increasing purchases of Japanese government bonds.

SILVER

In the face of a strong Dollar Silver has held very well today. At 11am PST, Silver is down $0.12, trading at $33.54 per ounce in active trading.  The range today was $33.18 on the low and $33.95 on the high.

Other Important news that affects precious metal prices:

The U.S. Commerce Department reported today a 0.4 percent gain in January retail Sales. This was very disappointing as it was half the 0.8 percent rise median forecast of economists.