Maintain long positions. The COMEX Gold’s Apr 2021 futures contract saw a muted session on Monday, inching USD0.90 lower to USD1,859. It declined USD1.30 to open at USD1,858.60, before trading in a narrow range between the day high and low of USD1,870.90 and USD1,850. The session ended at USD1,859, displaying equal strength between the bulls and bears. The commodity is currently trading below the 50-day SMA line, and faces some selling pressure on the overhead resistance. If it breaks below the USD1,842 support level, the commodity will revert to a downtrend, and see a downward correction. On the other hand, if it manages to climb above the 20-day SMA line, this should ignite positive momentum to lift the price higher. As the RSI is trending below the 50% level, we think the commodity will move sideways for consolidation in the coming sessions. As long as the stop-loss stays intact, we will maintain our positive trading bias.

We recommend traders maintain long positions, which were initiated at USD1,870.20, or the closing level of 20 Jan. For risk management, we set the stop-loss at USD1,842. The immediate support is unchanged at USD1,850, followed by the lower support at USD1,842. Towards the upside, the nearest resistance is revised to 29 Dec 2020’s closing level of USD1,887.30, followed by USD1,900.

Source: RHB Securities Research - 26 Jan 2021