Morning Gold & Silver Market Report – 2/14/2012

EUROPEAN NATIONS NOT SOLD ON GREEK AUSTERITY 

Gold pared some losses this morning after reports on retail sales and import and export prices were released. Retail sales rose, though not as much as expected, and the government also revised downward the reading for sales in November. Import and export prices both rose, as well, fairly in line with analysts’ expectations, but those prices fell when not considering food and fuels. This supports the Federal Reserve’s view that inflation is largely contained at the moment.

Since the announcement that an austerity and bailout agreement had been reached in the eurozone regarding Greece, the mood has been mostly negative. The initial disappointment was the realization that austerity measures had been agreed to in Greece before, but they were never implemented. Riots in the streets of Athens continue to rage over the planned measures, as the people do not want to give up their lush lifestyles. According to the Financial Times, European nations, including Germany, may only give conditional approval for a bailout until they can be convinced that austerity measures will be implemented fully. To add fuel to the fire in the eurozone, Moody’s downgraded the sovereign debt ratings of six countries, including Spain, Italy, and Portugal. It also downgraded the outlook for Austria, France, and the United Kingdom.

Though recent movement has tracked currency fluctuations, geopolitical tensions remain a key driver for the price of Gold. In Syria, government forces continue to attack rebels and civilians in an effort to stop the uprising. The city of Homs has been bombarded by artillery and rocket fire for 11 days, and a humanitarian crisis is brewing. The people are running out of food and fuel, and shops are closing because most residents are not leaving their homes.

At 8 a.m. (CST), the APMEX precious metals spot prices were:

• Gold - $1,719.00 – Down $4.90.
• Silver - $33.60 – Down $0.17.
• Platinum - $1,632.90 – Down $17.80.
• Palladium - $686.10 – Down $13.40.