Just as it looked like the price of gold was slipping, the credit rating agency Standard & Poor’s comes along and rocks the boat.

Up until yesterday it looked like investors were selling gold in order to get into cash, many to cover losses in other markets. Gold, after its almost meteoric rise, had fallen to a three week low.

But Standard & Poor’s, by downgrading Italian sovereign debt, seems to have sparked another minor flight to safety, with gold rising to just over $1,790 from an earlier $1,772.

Italy has now joined the ever growing list of downgraded countries, following in the footsteps of Spain, Ireland, Portugal, Cyprus and Greece.

It also puts the skids of concern under any move by Euro-zone policy makers to sort out their economic woes. That the Euro sank on the news is a good indicator.

The slightly strange thing is that after the initial worries the stock markets didn’t seem at all concerned by this most recent downgrade. The FTSE has gained some 73 points on the day thus far. And the Euro also regained some of its poise.

With only a small gold price rebound and an indifferent stock market it looks like the Italian debt problems have already been largely priced in and that S&P were reacting rather than leading.

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