In a sudden upward movement yesterday, the price of gold XAU/USD jumped towards the resistance level of $1833 per ounce. This is the highest for the price of the yellow metal in six months, starting from the level of $1797 per ounce and settling around the level of $1810 per ounce. In general, the price of gold rose above the psychological resistance of $1800 per ounce as China removed more Covid-19 regulations, which increased the pressure on the US dollar.
China no longer quarantines incoming travelers from early January, adding to the rapid rollback of strict pandemic rules and boosting sentiment for Asia's biggest economy. Markets will also absorb Friday's US data that indicated weaker inflation and slower consumer spending, which could ease pressure on the Federal Reserve to raise interest rates further.
Overall, the price of gold has gained more than 8% this quarter, supported by a weaker US dollar and hopes that the Federal Reserve will slow its aggressive monetary tightening.
The National Bureau of Statistics said the country revised its estimates for GDP growth for 2021 to 8.4% from 8.1% previously. China routinely revises its annual gross domestic product data. Gross domestic product was also revised up to 114.92 trillion yuan ($16.51 trillion) from 114.37 trillion yuan, the statistics bureau said in a statement on its website.
The final data from the bureau shows that the services sector, which accounts for 53% of China's GDP, was 8.5% larger in 2021 than the previous year. In the preliminary estimates of the office, the sector grew by 8.2%. The secondary sector - manufacturing and construction, which represents 39% of the gross domestic product - grew by 8.7% in 2021. This is compared to the initial estimate of the office with an increase of 8.2%. China's economy, the world's second largest, grew by 3% in the first nine months of 2022. For its part, the World Bank lowered its forecast for China's economic growth in 2022 to 2.7%, well below the official target of about 5.5%.
Today's XAU/USD Gold Price Predictions:
- The stability of the gold price XAU/USD above the psychological resistance of $1800 per ounce supports the control of the bulls.
- The price of gold recorded the upward levels that we expected before and indicated at the time that it is important to move the technical indicators towards levels of overbuying according to the performance on today's chart.
- This explains the rapid return of the price of gold towards the $1810 level which is generally the control of the bulls.
- The price of gold will not give up the current momentum without moving below the support level of $1775 per ounce.
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