Momentum remains strong; maintain long positions. The COMEX Gold showed a positive follow-up from the prior session’s invalidation of the 8 Jan’s “Bearish Engulfing” formation. At the close, it settled USD28.30 stronger at USD1,648.80. The USD1,650 immediate resistance was briefly tested with an intraday high of USD1,652.10. Despite the recent sessions’ upward moves having now reached an overbought RSI reading, the price action continues to suggest firm control by the bulls and show no price exhaustion signals. Hence, we are keeping our positive trading bias.

Having observed that the bulls are in firm control over the price trend, we maintain our long recommendation. We initiated these at USD1,586.40, ie the closing level of 13 Feb. For risk-management purposes, a stop-loss can be placed at the breakeven mark.

The immediate support is revised to USD1,640, or price point from the latest candle. This is followed by USD1,615, which was derived from 20 Feb’s candle. Conversely, the immediate resistance is now set at the USD1,650 level, and is followed by the USD1,670 threshold.

Source: RHB Securities Research - 24 Feb 2020