FXNEWS24 |Selling Silver XAU As Omicron Fears Persist Abate, Chinese Economy Holds

Silver has been on a downtrend since June, as the US started to turn bullish on the back of hawkish FED comments after some really high inflation numb

Silver has been on a downtrend since June, as the US started to turn bullish on the back of hawkish FED comments after some really high inflation numbers. Safe havens started to retreat as the sentiment improved and the USD got stronger. The pace of the decline has slowed in the last few months, but the trend remains bearish with highs getting lower after the retraces higher and moving averages acting as resistance.

Right now, the price is trading below the 50 SMA (yellow) and 100 SMA (green) which have been acting as resistance before. The price has formed two small dojis below these MAs which are bearish reversing signals after the climb and the price is overbought on the daily chart now. Besides that, the Chinese GDP numbers released early this morning were not that bad, which means the omicron variant is not having a major negative impact on the economy.

I’ve mentioned quite a few times already, that I just don’t see any bigger risk to the global recovery than China. The omicron risks are something that will percolate to global supply chains, inflation, and thus central bank outlook as well. And with Beijing being hit now, there’s more scrutiny than ever for China to try and control the situation.

Although, it might not be too bad. The GDP figures from China this morning were not too bad, so the sentiment should improve in the coming days.

Chinese Q4 2021 GDP Report

Chinese Q4 QoQ 2021 GDP 1.6% vs 1.1% expected
Q3 GDP QoQ was 0.2%
Chinese GDP YoY 4.0% vs 3.6% expected
Prior GDP YoY was 4.9%
2021 YoY GDP +8.1%

Comments by China President, Xi Jinping

Overall momentum of China’s economy is sound
China will continue with reform and opening up
The world economy still faces constraints
The world has found itself in a new period of turbulence and transformation
Countries should strengthen economic policy coordination

Those are rather general remarks but they set the tone for what to expect from the Chinese economy in the year ahead. Despite a shift to common prosperity, China’s economy is estimated to have recovered strongly from the pandemic last year. So, Xi’s message is that it will continue to do so this year as well.

SILVER

Selling Silver XAU As Omicron Fears Persist Abate, Chinese Economy Holds

Chinese Q4 2021 GDP Report

Comments by China President, Xi Jinping

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