Gold Makes a 9-Month High Above 1,800 After Jumping on Chinese Reopening
Skerdian Meta • 2 min read
Gold was trading at around $1,615 less than two months ago, after a strong bearish move since March when it was trading above $2,000. But, the sentiment improved as central banks started sounding less hawkish and slowed down with rate hikes, with inflation cooling off.
Risk sentiment turned positive and the USD turned bearish, so Gold gained around $200 since reversing from the support zone and the two-year low in late September, as expectations about slower interest rate hikes from the FED dimmed the USD and lowered the opportunity cost of holding bullion Gold, which pays no interest.
China has also been giving positive signals about reopening from the 3-year-long coronavirus lockdowns in recent months which has helped the sentiment for GOLD since China is the top Gold consumer. The price moved above the $1,800 level, but Gold kept retreating below that major level. Although lows have been getting higher and we remain bullish, buying the dips.
Gold H1 Chart – Jumping $30 on China Reopening News
The 20 SMA holding as support
We bought the last dip below $1,800 and that Gold signal closed in profit yesterday after the surge to the news of relaxed quarantine rules in China, which is a major step toward easing restrictions on the borders that have been mostly shut since 2020.
China’s National Health Commission announced on Monday that there would be no more quarantine requirements. People arriving in China will need a negative virus test 48 hours before departure while passengers will be required to wear protective masks on board. China will also only report Covid data once a month after the change to Category B management. So, Gold spiked above $1,833. Although the liquidity was very thin so the impact was elevated on such news. We saw a quick reversal after that, but the 20 SMA (gray) was holding on as support on the H1 chart, so we decided to open another long-term buy Gold signal.