Maintain long positions. With selling pressure having tapered, the COMEX Gold surged USD31.40 to settle at USD1,815.70 – returning to the territory above USD1,800. It started Thursday’s session at USD1,787 and progressed higher after mildly touching the day’s USD1,781.80 low. Strong demand lifted it towards the high of USD1,818.60 before closing at USD1,815.70 – the strongest session since 9 Mar. While we do not rule out the bears trimming positions or taking profit as the commodity rises, based on the strong demand displayed lately, selling pressure should be neutralised by the bulls – moving prices to test the next resistance level at USD1,830, followed by USD1,840. The 20-day SMA line will provide a strong support for the upward movement. With this strong technical setup, we are keeping our positive trading bias.

We recommend traders keep to the long positions initiated at USD1,791.80, or the closing level of 3 May. For risk management, the stop-loss is placed at USD1,775.

The immediate support is revised to USD1,790, followed by 6 May’s low of USD1,781.80. Towards the upside, the nearest resistance is projected at USD1,830, followed by the USD1,840 round figure.

Source: RHB Securities Research - 7 May 2021