All global financial markets, without exception, are awaiting the most important event of this week, which is the announcement of the US Federal Reserve.
The announcement is to raise US interest rates by half a point at once to confront the fiercest global inflation wave caused by the factors of the Corona pandemic and recently the Russian-Ukrainian war. Prior to this event, the price of gold settles down around the support level of $1869 an ounce, after losses to the support level of $1850 an ounce. Since last week’s trading, the gold price has been below the psychological resistance of $1900 an ounce until the important day happened.
In general, the gold market is affected by the tightening path of global central banks, especially the US Federal Reserve.
On the other hand, the gold market may take some momentum from another source, as the outbreak of the pandemic renewed in controlling investor sentiment, which paves the way for buying gold as a safe haven. On Wednesday, Beijing closed about 10% of stations in its extensive subway system as an additional measure against the spread of the Corona virus. Beijing has been on high alert for the spread of COVID-19, with restaurants and bars restricted to takeout only, gyms closed, and classes suspended indefinitely. The city’s major tourist sites, including the Forbidden City and the Beijing Zoo, have closed indoor exhibition halls, and are operating at only partial capacity.
A small number of communities where cases have been detected have been isolated. People living in “controlled” areas have been told to stay within city limits, including 12 areas considered high risk and another 35 considered medium risk. Taking a lighter touch in Beijing, China has generally adhered to its strict “zero COVID” approach restricting travel, testing entire cities, and setting up sprawling facilities to try to isolate every infected person. Lockdowns start with buildings and neighborhoods but spread citywide if the virus spreads widely.
That has caused the most disruption in Shanghai, as authorities slowly work to ease restrictions that have forced most of the city’s 26 million residents to stay in their apartments, apartment complexes or immediate neighborhoods for nearly a month, and in some cases longer.
According to the technical analysis of gold: The luster and luster of the bullish gold price will not return without the return of penetrating the psychological resistance of 1900 dollars an ounce, which stimulates the bulls to launch further higher. So far, there is a downward shift in the trend that may be supported by a move towards the support levels of 1848 and 1830 dollars, respectively. As I mentioned before, I still prefer buying gold from every descending level. Global geopolitical tensions and the pandemic’s survival in controlling sentiment, especially as it threatens the second largest economy in the world. These are enough factors to think about buying gold in the end.
