Trailing stop triggered; Initiate long positions. The COMEX Gold’s Apr 2021 futures contract breached the 50- day SMA line, adding USD26.20 to settle at USD1,870.20. It opened flat at USD1,843.20. Meanwhile, buying interest was seen at the session’s low of USD1,834.80. Underpinned by strong momentum, the commodity climbed towards the session’s high of USD1,875.60. With Apr 2021 contract having a higher opening interest than Feb 2021 contract, traders are closing out Feb 2021 contract and moving to Apr 2021 contract. Since breaching the 50-day SMA line, there have been signs of a changing trend from the higher high pattern from 12 Jan. The next hurdle is the overhead resistance of the 20-day SMA line. As such, we shift to a positive trading bias.

We close the short positions initiated at USD1,908.60, or the closing level of 6 Jan, after triggering the trailing stop at USD1,864. Conversely, we initiate long positions at the latest closing level of Apr 2021 contract. For riskmanagement purposes, we set a stop loss at USD1,821.30.

Downside support is revised to USD1,850 and 11 Jan’s low of USD1,821.30. Towards the upside, the immediate resistance is pegged at the physcological level of USD1,900, followed by USD1,915.

Source: RHB Securities Research - 21 Jan 2021