Gold was heading for its strongest weekly gain since January, with RHB Investment Bank Bhd (RHB Research) maintaining a positive trading bias on COMEX gold as the precious metal consolidates above its 50-day simple moving average (SMA) line.
Spot gold rose 1.1% to US$4,285.89 an ounce on Friday and was up 6% for the week, while US gold futures gained 1.1% to US$4,344.90. Investors were also awaiting US nonfarm payrolls data for clues on the Federal Reserve’s interest rate outlook.
RHB Research said COMEX gold consolidated after losing US$5.30 to close at US$4,268 on Thursday, following an intraday range of US$4,249.80 to US$4,331.50. The bearish candlestick with a long upper shadow suggested buyers were respecting the US$4,400 resistance level, raising the possibility of a near-term correction towards the 50-day SMA.
However, the research house said the technical setup remains bullish as long as gold stays above the 50-day SMA. It expects the metal to resume its upward movement after the consolidation and retest US$4,400.
RHB Research advised traders to retain the long position initiated at the Aug 5 close of US$4,273.30, with a stop-loss at US$3,950. It identified support at US$4,100 and US$3,950, while resistance stands at US$4,400 and US$4,650.
Separately, StoneX senior analyst Matt Simpson said hopes of an end to the Iran war had helped lower inflation expectations, supporting gold’s rally.
