Maintain short positions. The COMEX Gold tested the USD1,865 support mark for a third session – it reached a low of USD1,854.10, before closing USD10.60 lower at USD1,866.30. The latest session’s price action around the said support mark did not flash out any positive price reversal signal. Thus, the multi-week correction phase, which began with 7 Aug’s “Bearish Engulfing” formation, is considered still in place. In addition, the commodity is now trading firmly below the 50-day SMA line, while the RSI reading is yet to reach the oversold threshold. We maintain 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 maintained at USD1,865, or the low of 12 Aug. This is followed by USD1,842 – near 8 Jul’s high. Moving up, immediate resistance is set at USD1,875, followed by USD1,890 – both were derived from 23 Sep’s candle.

Source: RHB Securities Research - 28 Sept 2020