Maintain long positions. The COMEX Gold’s upside movement paused yesterday, amid strong profit-taking activity. At one point, the commodity surged on strong demand, testing the day’s high of USD1,976.50. However, selling activity near the USD1,950 resistance level brought it to the day’s low of USD1,878.60 before closing at USD1,926.30. Although it printed a long upper shadow, we think the pullback from the resistance level was a healthy correction. Meanwhile the commodity also formed a strong support level near USD1,880. Hence, we see the COMEX Gold maintaining its bullish posture. It may consolidate sideways above the support level before regaining upside momentum. As such, we stay with our positive trading bias.

Traders should keep the long positions initiated at USD1,818.50 or the closing level of 11 Jan. To manage trading risks, the trailing-stop threshold is set at USD1,850.

The immediate support is marked at USD1,880, followed by USD1,850. On the upside, the first resistance remains at USD1,950, followed by the USD2,000 round figure.

Source: RHB Securities Research - 25 Feb 2022