Maintain long positions. The COMEX Gold failed to sustain its intraday gains as it slid from a high of USD1,908.20 to close at USD1,895.50 – a decline of USD7.70. The soft session can be seen as a possible sign of profit-taking, following the rebounds during the two prior sessions. This does not alter our expectation for the commodity to stage a rebound after recently breaching a low of USD1,851. Towards the upside, at the very minimum, we see a good possibility for the rebound to reach the 20- and 50-day SMA line areas. Hence, we are keeping our positive trading bias.

We recommend traders maintain long positions. We initiated such positions at USD1,903.20, ie the closing level of 29 Sep. For risk-management purposes, we set the stop-loss level at the USD1,851 mark.

We revise the immediate support to USD1,880 – near the low of 29 Sep. This is followed by USD1,851, near 28 Sep’s low. Towards the upside, the immediate resistance is set at USD1,911.70, and followed by USD1,927 – around the 20-day SMA line.

Source: RHB Securities Research - 1 Oct 2020