Maintain long positions while moving the trailing stop higher. The COMEX Gold saw the bullish momentum extend yesterday, jumping USD29.50 to settle at USD1,867.60 – breaching the previous resistance of USD1,850. On the first trading session of the week, the commodity opened stronger at USD1,845.90. It moved sideways for most of the session until it found the day low at USD1,841.10. Strong demand emerged during the US trading hours, lifting the precious metal to reach the USD1,869.30 day high before settling at USD1,867.60. Underpinned by strong momentum, the COMEX Gold has formed a fresh “higher high” bullish pattern and is on track to test the next resistance levels at USD1,880 and USD1,900. Despite the RSI moving into overbought territory, the momentum is showing no signs of slowing down. As such, 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 purposes, the trailing-stop threshold is raised to USD1,819.

The immediate support is revised to USD1,841.10, ie the low of 17 May, followed by USD1,819 – the low of 14 May. Towards the upside, the nearest resistance is projected at USD1,880, followed by USD1,900.

Source: RHB Securities Research - 18 May 2021