Maintain short positions while placing the trailing-stop to the breakeven level. The COMEX Gold charted its third consecutive black candle yesterday, shedding USD39.20 to close at USD1,868.40. At one point, it tested the USD1,865 support mark with a USD1,856 low. The negative performance has also placed the precious metal below the 50-day SMA line – a negative technical observation. All in, the correction phase – which started from 7 Aug’s “Bearish Engulfing” formation – is still not showing signs of completing. Hence, we are keeping to our negative trading bias.

We recommend traders maintain their short positions. We initiated these at USD1,910.60 – the closing level of 21 Sep. For risk-management purposes, a stop-loss can now be placed at the breakeven mark.

The immediate support is revised to USD1,865, or the low of 12 Aug. This is followed by USD1,842 – near 8 Jul’s high. Meanwhile, immediate resistance is now eyed at USD1,875 and followed by USD1,890 – both were derived from the latest candle.

Source: RHB Securities Research - 24 Sept 2020