Maintain long positions. The COMEX Gold saw selling pressure re-emerge yesterday, falling USD15.80 to settle at USD1,776 – the worst correction day since 30 Mar. It started Tuesday’s session at USD1,793.20 and trended towards a day high at USD1,799.50. US Treasury Secretary Janet Yellen’s speech caused jittery sentiment, however, which saw the bears dump commodites. The COMEX Gold found the day low at USD1,769.20 and rebounded to close at USD1,776. Overall, it found footing above the 20-day SMA line – hence, the uptrend structure is deemed intact. Since the bullish 20- and 50-day SMA line crossovers, it has formed a “higher low” and is moving upwards. If the current correction extends and breaches USD1,760, we may see early “lower low” signs and possible correction towards the 50-day SMA line. We keep to our positive trading bias now.

We recommend traders shift to long positions that were initiated at USD1,791.80, or the closing level of 3 May. For risk-management purposes, the initial stop-loss threshold is placed at USD1,760.

The immediate support remains at USD1,770, followed by 28 Apr’s low of USD1,761.80. Towards the upside, the nearest resistance sticks to USD1,795 and is followed by the USD1,805 whole number.

Source: RHB Securities Research - 5 May 2021