Gold prices ended the day up, buoyed by a  Chinese cut in lender reserve requirements and optimism in the markets that Greece’s bailout would be approved by eurozone finance ministers. In an e-mail today, William Adams, the head of research for FastMarkets.com, wrote, “The metals and markets in general have been boosted following the cutting of reserve ratios in China.” In response to the news from Greece, the euro climbed versus the dollar. Precious metals prices historically move opposite to the dollar. Silver, Platinum, and Palladium prices ended the day up, as well.

As a second round of talks was under way today between Iranian officials and representatives from the International Atomic Energy Agency (IAEA) over Iran’s nuclear program, Israel made it clear that it isconsidering whether to attack the nuclear infrastructure in Tehran. At the same time, a day after Iran suspended exports of oil to Britain and France in response to new economic sanctions, the Middle Eastern country is again threatening to close the Strait of Hormuz. Closing the strait would prevent oil tankers from traveling to and from the Persian Gulf. Many are concerned that Iranian nuclear efforts, including the enrichment of uranium, is part of an effort to develop nuclear weapons. Iran has firmly denied the validity of such concerns, saying that its nuclear program is for the development of civilian power plants only. However, in November the IAEA stated that it was in possession of information that showed some of Iran’s research was weapons-related. Israel has repeatedly stated that it feels its existence would be threatened if Iran developed nuclear weapons capability.

According to a report by the Organization for Economic Co-operation and Development (OECD),developed economies saw their economic growth slow to a near standstill in the latter part of 2011. For the 34 economies included in the OECD, Gross Domestic Product (GDP) only grew 0.1 percent from the third quarter to the last quarter of 2011. And although GDP was 1.3 percent higher than it was in the last three months of 2010, that still represents a growth rate that is the slowest in two years. Only the United States’ 0.7 percent economic growth kept the overall GDP growth number from being in the negative. The economy of the eurozone shrank by 0.3 percent in 2011’s fourth quarter. Economists fear that shrinkage signifies that a recession is imminent.

At 4 p.m. (CST), the APMEX precious metals spot prices were:

• Gold - $1,734.50 – Up $9.60.
• Silver - $33.67 - Up $0.38.

The New York Stock Exchange is closed for President’s Day, but the precious metals market opened at its regularly scheduled time at 5 p.m. (CST) Sunday. Two events over the weekend pushed precious metals prices upward. First, the People’s Bank of  China announced  it was cutting major lender’s reserve requirements by 50 basis points. The call is to catalyze lending and increase liquidity. Commodities went up across the board, and precious metals prices went right along with them.

Second is the hope that a  Greek bailout  would be approved later today. The finance ministers from 17 nations are in Brussels, Belgium, discussing a $130 billion-euro ($172 billion U.S.) deal, which would be the second rescue in two years. There is still the question of how much private bond-holders will give up, along with concerns that even if a bailout happens, Greece eventually will default.

Oil futures surged 2 percent  Sunday night on reports that Iran already has stopped shipping crude oil to British and French companies. Iran said it would ship this oil to new customers instead. Prices for Brent and WTI oil futures went up in low-volume trading.

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

• Gold - $1,734.70 – Up $9.30.
• Silver - $33.61 – Up $0.32.

• Gold - $1,724.20 – Down $3.20.
• Silver - $33.34 – Down $0.10.

Precious metals prices are trading higher this morning thanks to increasing demand, a stronger euro, and inflationary concerns. As mentioned yesterday,  data from the World Gold Council showed that China and India generated 49 percent of demand for Gold as an investment. Marcus Grubb, managing director for investment at the World Gold Council, said, “It is likely that China will emerge as the largest Gold market in the world for the first time in 2012. What is certain is that the long-term fundamentals for Gold remain strong, with a diverse and growing demand base, coupled with constrained supply-side activity.”

The euro was boosted by  fresh hopes of a second bailout for Greece. Finance ministers from the eurozone are set to meet Monday, and leaders from Germany, Italy, and Greece are all optimistic that an agreement will be reached. However, tensions are rising in the region because the leaders have again pushed this problem to a crucial moment. Austrian Finance Minister Maria Fekter said, “The skepticism is especially strong among the triple-A states over whether Greece will be able to make it. The risk of a Greek insolvency is not off the table.”

The  consumer price index was released in the U.S.  this morning, and there is a concern that higher energy costs may hamper economic recovery. Though a large portion of consumers’ paychecks go to food and energy costs, the Federal Reserve does not include those two factors when they consider inflation. However, the core index (not including food and energy) still rose 0.2 percent, which was in line with analysts’ expectations.

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

• Gold - $1,733.40 – Up $6.00.
• Silver - $33.58 – Up $0.14.

Gold prices ended the day higher again today,  pushed upward mid-session  by a drop in the dollar, as well as the jump in oil prices brought on by the continued tension between Iran, Israel, and the U.S. “With the euro making a bit of recovery in the midday, Gold is getting support from the possible inflationary effects from the very robust crude oil price trends,” said Richard Hastings, a Global Hunter Securities macro strategist. Hastings said, “Inflation will inevitably bubble up, and this should give Gold its next move significantly higher towards the late spring this year.” Platinum ended the day lower in price, while Silver and Palladium charted gains.

Moody’s Investors Service announced today that  131 financial institutions worldwide could soon receive a credit rating cut. Of the financial institutions facing a rating cut, 114 are spread across Europe. Moody’s explained that any future cuts would be a result of the sovereign debt crisis plaguing the eurozone and a reflection of deteriorating creditworthiness of European governments. The institutions that Moody’s indicated could see a cut in their credit rating include Bank of America, UBS, Morgan Stanley, Goldman Sachs, and Deutsche Bank. Last week, six European nations (including Italy and Spain) had their credit ratings cut by Moody’s. At the same time, the rating service warned France, Austria, and Britain about the possibility that their credit ratings could also see cuts in the near future.

Republicans and Democrats have hammered out a deal to  extend the payroll tax cut  due to expire at the end of February. Although leaders from both parties indicated they would support the deal, many see the agreement as a victory for Democrats, since Republicans did not demand that the tax cut extension be offset by a corresponding reduction in spending, as has been the case during past negotiations. Despite House Speaker John Boehner’s description of the deal as fair, a number of Republicans in Congress are unhappy that this agreement will add $100 billion to this country’s national debt.

At 4 p.m. (CST), the APMEX precious metals spot prices were:

• Gold - $1,729.00 – Up $1.90.
• Silver - $33.55 - Up $0.07.