Stop-loss triggered; Initiate long positions. The COMEX Gold was boosted by bargain hunting, recovering USD21.20 to settle at USD1,834.20. The commodity opened stronger at USD1,818.10 yesterday, and found a footing near the day’s low of USD1,807.30. Renewed demand lifted prices towards the day’s high of USD1,840.60, before it closed at USD1,834.20. The average trading range (ATR) for the last 10 sessions was at USD16.00. A projection of 1x ATR from USD1,834.20 will meet the resistance at USD1,850, and support at USD1,818. After breaching the resistance level of USD1,823, the commodity is moving into a counter-trend rebound, and is poised to test the overhead resistance near the 20-day SMA line. Hence, we shift to a positive trading bias.

Our previous short positions, initiated at USD1,833.40 or the closing level of 2 Feb, were closed out in the latest session after triggering the stop-loss at USD1,823. Conversely, we initiate long positions at the closing level of 8 Feb. For risk management purposes, a stop-loss can be placed at USD1,794.

The immediate support is revised to USD1,818, followed by USD1,802. Towards the upside, the nearest resistance is pegged at the USD1,850 round figure, followed by USD1,866.

Source: RHB Securities Research - 9 Feb 2021