Gold and Silver prices  are trading flat this morning, held down by a weak U.S. stock market.  Helping the price of Gold, however, is the announcement by the Bank of Japan that further easing is on its way.  GFMS analyst Rhona O’Connell said, “At the international level, it’s another expansionary element to add to the U.S.’ and EU’s actions not an earth-mover, I wouldn’t have thought, though, as Japan’s been flirting with deflation for ages.”

Some analysts are predicting that 2013 will be the year that the eurozone will stop being a major risk to the global economy.  However, with that comes the risk of complacency.  Jacob Kirkegaard at the Peterson Institute for International Economics said, “The risk is that complacency takes hold because there is no more urgency in the crisis, and that everything that has been done up until now will be deemed sufficient.    [If that happens,] Europe will turn into the next Japan, and become a permanently depressed or stagnating economic area.”

At 9 a.m. (EST), the APMEX Precious Metals spot prices were:

• Gold, $1,690.20, Up $1.20.
• Silver, $32.00, Up $0.03.

It is well know that the price of Gold can be affected by many sources, and this week was no different. Monday the price of Gold got a boost from economies around the globe.  The Gold price rose overnight as the U.S. dollar lost ground against world currencies. Expectations of aggressive monetary easing from Japan, a stronger euro and physical buying from China also added to Gold’s strength. While the Gold price has a negative correlation to the U.S. dollar, it has a positive correlation to the euro, which moved up as much as half a percent after the European Central Bank kept interest rates unchanged. Gold is higher this morning, thanks in large part to Platinum. Since the world’s top Platinum producer’s reported output would be cut by 400,000 ounces,  Platinum’s price has overtaken Gold’s  for the first time since March, however, it is seemingly boosting Gold’s appeal as well. Saxo Bank vice president Ole Hansen said, “Platinum is the main driver … [but] Gold is also being supported by the fact that we have now managed to close above 200 day simple moving average for a third day.” Hansen went on to talk about other factors in Gold’s price. “The debt ceiling debate should also offer some support as it once again raises the risk that U.S. growth could be hurt. Gold is all about re-building confidence and the last few days have done just that.” In the Silver market there was big news from the United States Mint. This month the U.S. has sold over six million ounces of Silver and they have suspended their Silver sales.  In essence, the mint has sold out of Silver coins. We have yet to reach the record of 6.42 million ounces sold in January of 2011, but there is still time left in the month. When sales resume, it will be interesting to see how quickly the supply 2013 Silver American Eagle coin is consumed again. The U.S. mint began selling the 2013 coin just this month.

MORE U.S. ECONOMIC ISSUES

There are a couple of large issues looming in the economic future in the United States: First, whether the Federal Reserve will continue its bond buying program as the economy appears to be recovering, and second, if politicians will come to a debt ceiling agreement.  Analysts suggest Gold will receive support with the upcoming debates over raising the U.S. debt ceiling. “We view the recent sell-off as a good entry point to re-establish fresh tactical longs in Gold before the run up to the debt ceiling debate … a likely catalyst for higher Gold prices,” Goldman Sachs said in a note. If the government does not find a way to avoid hitting the debt ceiling, the result could be disastrous.There are some financial experts who believe it could trigger a new recession in the country.  Tim Phillips, president of Americans for Prosperity, says the focus should not be solely on the debt ceiling, but the amount of government spending. “We're saying calibrate your message. Focus on overspending instead of long-term debt. Focusing on [the debt ceiling] makes the messaging more difficult.” U.S. credit rating agency Fitch announced earlier this week  the U.S. could potentially lose its AAA status  if there is a repeat of the 2011 fiasco over increasing the country's debt. “The broader debate that is going to happen in the U.S. in the run-up to the debt ceiling crisis point at the end of February is going to be supportive of Gold. Talks of downgrades from the major rating agencies will be part of it,” Credit Suisse analyst Tom Kendall said.

• Gold, $1,687.10, Down $5.70.
• Silver, $31.89, Up $0.05.