Maintain long positions. The COMEX Gold dipped lower yesterday to test the support of the 20-day SMA line, as it declined USD12.90 to settle at USD1,727.50. The precious metal opened the session at USD1,741.20 and, after a choppy session, it went up to test the USD1,744.40 session high. However, during the US trading hours, the tide changed – we saw the commodity falling to a session low of USD1,725.20. It closed at USD1,727.50, ie at the border of the 20-day SMA line. Since touching the recent high of USD1,756, the counter-trend rebound is losing its momentum, as evidenced by the RSI falling below the 50% threshold. However, as long as the stop-loss level stays intact – ie the COMEX Gold still poses a “higher low” pattern – we stick to our positive trading bias.

We recommend traders remain in long positions – initiated at USD1,729.20, or the closing level of 15 Mar. For risk-management purposes, the stop loss is placed at USD1,715.

The immediate support remains at 17 Mar’s low of USD1,724.10, followed by 18 Mar’s USD1,719.10 low. Towards the upside, the immediate resistance is pegged at 18 Mar’s high of USD1,756 and followed by the USD1,765 whole number.

Source: RHB Securities Research - 24 Mar 2021