Gold And Silver: Daily Market Outlook. Feb 14th 2012.

Moody’s downgraded the sovereign ratings of 6 EU countries, including Spain , Portugal and Italy, simultaneously warning France, Austria and the UK.

President Obama revealed the draft budget for 2013. It implies a $1.33trillion deficit in 2012, which will be cut down to $901B in 2013 and down to 5% of the GDP by 2022 at the expense of tax hikes for the rich. The new taxes are expected to help the US authorities allocate extra $1.4trillion. The draft bill must be considered by the US Congress till Oct 1^st 2012.

Yesterday the Bank of Japan expanded its QE program (bond purchases) by 10 trillion yen (some $128B) and set the inflation target at 1%. The key interest rate remained unchanged.

Israel blames Iran for organizing terrorist attacks on its embassies around the world.  Iran denies any involvement.

Amid the anti-austerity riots in Greece and the rating cuts initiated by Moody’s, the US Dollar strengthened, thus making precious metals decline in value. The demand for physical gold in Asia is reserved. Investors are waiting for the situation to clarify.  In Hong Kong , the premium for physical gold declined down to $1-1.5/oz.

According to the Department of Commodity Trading of , today gold is ready to continue its short-term downtrend to 1700, 1670. The closest levels of resistance are 1720-1723. If an H1 bar closes above 1725, this will increase the probability of rallying up to 1750.

Silver is in downtrend as well.  The closest targets are 65-33.70. Once the price fails to consolidate above 33.75, this will increase the probability of going further down to 33.2, 33. However, if an H1 bar closes above 33.75, it will trigger the bullish scenario. The targets are 34, 34.25.