Gold prices could extend their upward momentum towards US$4,500 an ounce after COMEX gold futures rebounded strongly last Friday, supported by improving technical indicators, according to RHB Research.
In its latest technical analysis, the research house maintained a bullish trading bias on the precious metal after COMEX gold futures climbed US$25.50 to close at US$4,390.70, moving closer to breaking above the 20-day simple moving average (SMA).
Gold opened Friday’s session at US$4,347.20 before touching an intraday low of US$4,338.70. Prices subsequently rallied to a session high of US$4,405.30 before settling at US$4,390.70.
RHB said the positive price movement, coupled with an upward-trending Relative Strength Index (RSI), suggests that bullish momentum is gathering pace again.
The research house expects gold to test the immediate resistance level of US$4,500 if the recovery continues, with the next resistance projected at US$4,700.
On the downside, US$4,300 remains the immediate support level, followed by stronger support at US$4,150.
RHB said gold’s ability to remain above US$4,300 would be critical in sustaining the current bullish technical outlook.
“As long as the commodity trades above this immediate threshold, the bulls will own the technical upper hand,” it said.
The research house maintained its recommendation for traders to hold long positions initiated at US$4,273.30, based on the closing price on Aug 5, while keeping the stop-loss threshold at US$4,300 to manage downside risks.
The latest assessment suggests that gold’s near-term direction will depend on whether prices can sustain the recovery above US$4,300 and subsequently break through the US$4,500 resistance level.
