XAU/USD: growth in demand from China supports quotes 21 April 2021, 12:37

XAU/USD: growth in demand from China supports quotes

21 April 2021, 12:37

Scenario
Timeframe	Weekly
Recommendation	BUY STOP
Entry Point	1793.0
Take Profit	1845.0
Stop Loss	1770.0
Key Levels	1681.0, 1793.0, 1757.0, 1681.0

Alternative scenario
Recommendation	SELL STOP
Entry Point	1757.0
Take Profit	1681.0
Stop Loss	1780.0
Key Levels	1681.0, 1793.0, 1757.0, 1681.0

Current trend

Gold quotes are correcting upward, trading at $1783 per ounce, and today, they can break the key resistance around 1800.0.

This week, there were reports that China has decided to significantly increase its physical gold imports. According to Reuters, the authorities have allowed banks to purchase an additional 150 tons of metal annually. According to the current import value, this corresponds to $8.5B. According to analysts, the first import may take place in April-May this year. Although the PRC is one of the world leaders in the purchase of gold and silver, this message is alarming for investors. Beijing has repeatedly stated that it is going to create its currency, which will be backed by physical gold, and the increase in metal imports may just be one of the leading factors of this event.

Support and resistance

Quotes are moving within the global corrective trend, strengthening in the direction of the resistance line. Technical indicators hold a buy signal: Alligator indicator’s EMA fluctuations range expands towards growth, and the histogram of the AO oscillator trades in the positive zone.

Resistance levels: 1793.0, 1845.0.

Support levels: 1757.0, 1681.0.

Trading tips

After corrective growth or consolidation above the local resistance level of 1793.0, buy positions with the target at 1845.0 will be relevant. Stop loss is 1770.0. Implementation period: 7 days or more.

After global decline or consolidation below the local support level of 1757.0, sell positions are relevant with the target at 1681.0. Stop loss is 1780.0.