A piece of news in China stimulates the gold price to break through 1920 dollars! Analyst: gold price "dead cat rebound" short sellers hope to overcome key support

24K99 On Thursday (September 7), in the European market, spot gold continued to rise in the short term, and the gold price just broke the 1920 dollar/ounce mark. The latest news said that China increased its gold reserves for the 10th consecutive month, which stimulated the short-term strength of gold prices.

(15 minutes of spot gold source: 24K99)

(Related data drawing)

The People's Bank of China said Thursday that its gold holdings increased by 930000 ounces in August. This is equivalent to 29 tons. At present, China's total gold reserves are 2165 tons, of which about 217 tons were increased in a series of purchases starting last November.

According to the updated data on the official website of the People's Bank of China on September 7, as of the end of August, gold reserves had reported 69.62 million ounces, and 68.69 million ounces at the end of July, the tenth consecutive month of increase.

As the largest economy in Asia, China has been one of the most enthusiastic buyers of gold in recent years. Analysts pointed out that although the rise in global interest rates usually weakens the demand for interest free gold, large-scale purchases helped support gold prices.

Dhwani Mehta, an analyst at FXStreet, pointed out on Thursday that the gold price had a "dead cat rebound" before the United States released the latest data and the Federal Reserve officials spoke.

Mehta said that the gold price must fall below the key support level of 1916 dollars/ounce to achieve a sustained downward trend. Once this support is lost, the gold price may test $1900/ounce.

Mehta said that later on Thursday in the United States, Federal Reserve policymakers Patrick Harker, Austan Goolsbee, John Williams, Raphael Bostic and Michelle Bowman would respectively deliver scheduled speeches, which may have a significant impact on the gold price denominated in dollars.

Anil Panchal, an analyst at FXStreet, said that, looking ahead to this trading day, several Fed officials will make speeches, which may bring fluctuations to the gold market. The number of weekly initial jobless claims, quarterly non-agricultural productivity data, and unit labor cost in the second quarter will also be important factors to observe the clear direction of gold prices.

Analysis on the Latest Technology Prospect of Gold

Mehta pointed out that the gold price tested the support level of 1916 dollars/ounce at the junction of the 21 day moving average and the 200 day moving average on Wednesday, and once hit a new weekly low of 1915 dollars/ounce.

Although the relative strength index (RSI) fell on the 14th, gold buyers are still defending the above support level. This leading indicator shows that the downward potential of gold price still exists.

Mehta said that, therefore, the gold price needs to fall below the above support level at the end of the day in order to extend the downward trend to the support area slightly higher than the US $1900/ounce threshold, which is close to last week's low of US $1904/ounce.

After that, the $1900/oz threshold will challenge the bullish commitment. Once it falls below this threshold, the gold price will inevitably test the multi month low of $1885/oz.

(Source of daily line chart of spot gold: FXStreet)

On the upside, Mehta said that the gold price will need to regain the 50 day moving average support - resistance level of $1932/oz at the end of the day to move towards the 100 day moving average barrier of $1951/oz again.

From the top, the static resistance level of 1970 dollars/ounce and the high of 1982 dollars/ounce on July 27 will challenge the recovery trend of gold prices.

At 18:11 Hong Kong time, spot gold was reported at US $1920.94 per ounce.

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