Gold And Silver: Daily Market Outlook. Feb 9th 2012.

Yesterday China released its inflation report. The PMI index came out slightly worse than expected while consumer prices turned out higher than expected. This is expected to influence the People’s Bank of China’s decision concerning its monetary policy. Some investors are still sure that the interest rates will be lowered this month.

There are rumors that Japan is planning to resume the T-bond futures trading in test mode.

The prime Minister of Greece has arrived to Brussels without an agreement on reforms and budgetary spending cuts as yesterday there was no unity between the leaders of opposing parties. They should have found the possibility of saving 3.3B euro in 2012 and 13B euro in 2013-2015 in exchange for another loan (130B euro). It is reported that the opposing parties managed to approve 90% of the agreement but the pension reform remained unapproved. It seems like the parties do not want to risk their image and ratings in advance of April’s elections. The Greek debt talks are nearly over. Greece is looking for the ways to make the ECB write down a part of its debt as well.

The ECB is expected to leave the interest rates unchanged this month.

The Bank of England is said to poor extra 50B pounds into the British economy at the expense of expanding the QE program (bond purchases) by 325B pounds.

This economic situation in Iran keeps deteriorating. Due to sanctions, Iran is forced to sell to India 45% of its oil for Rupees. South Korea also uses its national currency to pay for the export of crude oil from Iran.

There are rumors that Israel is about to start a military operation against Iran. In its turn, Iran threatens to assault on US military bases throughout the world.

According to the Department of Commodity Trading, , today gold may test 1743, 1751. So far, gold has failed to consolidate above 1750. If it does succeed, this will increase the probability of a further rally up to 1761, 1766. A break above the monthly high will increase the probability of reaching 1800. The closest support is 1731. If it is broken, the price may go down to 1723-1724, and even 1700.

As for silver, will probably be testing the 34.25 resistance. If an H1 bar fails to close above 34.25, this will increase the chance of a downswing to 34, 33.70, 33.50. In order to resume the rally, silver will have to consolidate above 34.25. After that, the closest target will be 34.50 and may be even 35.