Maintain long positions. The COMEX Gold is taking a breather after the recent rally, declining USD5.00 to close at USD1,878.90. It gapped down last Friday to start at USD1,880.40. Mild selling pressure during the early session dragged it to the day low of USD1,872.50 before buying interest occurred during the US session to lift it towards the USD1,892.30 day high. During the late trading session, it fell to a level near the day low again and rebounded to close near the USD1,878.90 opening price – forming a Doji pattern. The lastest price action showed that both bulls and bears were at equal strength despite mild profit-taking near the top. The commodity may move in a sideways consolidation trend before regaining strength to test the immediate resistance. As long as it continues to form a “higher low” bullish pattern while staying above the stop loss, we keep a positive trading bias.

Traders should stick to the long positions initiated at USD1,791.80, or the closing level of 3 May. For risk management purposes, the trailing-stop threshold can be placed at USD1,845.

The immediate support remains unchanged at USD1,852.20 – the low of 19 May – and followed by USD1,830.50, or the low of 10 May. The nearest resistance is set at 19 May’s high of USD1,891.30 and followed by USD1,900.

Source: RHB Securities Research - 24 May 2021