Initiate short positions as rebound failed to sustain. During the latest session, the COMEX Gold traded in one of its widest ranges in recent weeks, between USD1,885.40 and USD1,962.90, before closing USD51.50 lower at USD1,910.60. The closing level placed the commodity below the 50-day SMA line, and marked a possible end to its multi-week rebound phase. This implies that chances are high for the precious metal to resume its correction phase which began with 7 Aug’s “Bearish Engulfing” formation. Premised on this, we now switch our trading bias from positive to negative.

Our previous long positions, initiated at 26 Aug’s closing level of USD1,944.10, were closed out at USD1,925 during the latest session. Concurrently, we initiate short positions at the latest closing level. For risk-management purposes, a stop-loss can be placed above USD1,970.

The immediate support is revised to USD1,885.40 – the latest low. This is followed by USD1,865, the low of 12 Aug. Moving up, immediate resistance is set at USD1,940, which is a price level near the 50-day SMA line. This is followed by USD1,970.

Source: RHB Securities Research - 22 Sept 2020