Maintain long positions. Despite mild selling pressure yesterday, the COMEX Gold managed to pare most of its losses and settled at USD1,836.10. The commodity started Tuesday’s session flat at USD1,836.20. Although it rose to the day high at USD1,842.50, it had a V-shaped movement during the US trading hours, where it fell rapidly to the USD1,817.80 day low and rebounded to close at USD1,836.10 – printing a long lower shadow. This showed that buying pressure was greater than selling pressure. Hence, the COMEX Gold is still within the uptrend structure. As long as it continues to form a “higher low” bullish pattern, it may edge higher to re-test the USD1,840 resistance level. Since it is moving on an upward trajectory, we maintain 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 trailing-stop level is placed at USD1,805.

The immediate support remains unchanged at USD1,815, followed by the USD1,805 round figure. Towards the upside, the nearest resistance is sighted at USD1,840 and followed by USD1,850.

Source: RHB Securities Research - 12 May 2021