Maintain long positions. After an unfruitful attempt to cross the resistance, the COMEX Gold retraced USD0.30 to close at USD1,905. The commodity started the session stronger yesterday at USD1,906.80. It then whipsawed between the USD1,894.50 day low and day high at USD1,919.20 before settling in at USD1,905. From the latest price action, the USD1,915.60 resistance has become stronger. As we have observed the RSI indicator rounding the top, this indicates the bulls are tiring – we may see some mild correction ahead. If the RSI breaches its current trendline and heads lower, expect the COMEX Gold to see selling pressure extended, bringing it lower to test the USD1,893.20 support, followed by USD1,872.50. Before that happens, we retain our 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 is raised to USD1,875.

The immediate support remains at USD1,893.20, or the high of 19 May. This is then followed by USD1,872.50, ie the low of 21 May. The nearest resistance is sighted at 26 May’s high of USD1,915.60, followed by USD1,925.

Source: RHB Securities Research - 2 Jun 2021