Trailing-stop triggered; Initiate short positions. The COMEX Gold saw extended selling pressure yesterday. The commodity started at USD1,781.90 and rose to the day’s high of USD1,789.90. Despite strong performance during the Asian trading hours, selling pressure dragged it to the day’s low of USD1,754.60. A brief rebound during the US trading hours saw it paring its losses to close at USD1,768.30. As it failed to establish a foothold above the previous support level of USD1,770, the commodity has begun a downward movement. It will likely drift lower towards the 20-day SMA line or test the next support level near USD1,761.80. As the trailing-stop was breached, we shift to a negative trading bias.

We closed out the long positions initiated at USD1,715.60 on 31 Mar, after the trailing-stop was triggered at USD1,770. Conversely, we initiate short positions at 29 Apr’s close of USD1,768.30. For risk management, an initial stop-loss is placed at USD1,795.

The immediate support is revised to 28 Apr’s low of USD1,761.80, followed by the USD1,750 round figure. Towards the upside, the nearest resistance is set at USD1,785, followed by USD1,795.

Source: RHB Securities Research - 30 Apr 2021