Maintain long positions. The COMEX Gold has rallied strongly. It initially gapped down after opening at USD1,891.20, dipping to day low of USD1,890.00, and then rebounding sharply to settle at USD1,916.30 – just USD1.60 shy of the day’s USD1,917.90 high. It also breached the USD1,911.70 resistance level, and is on a path of recovery towards the 20-day SMA line. We are optimistic that the commodity is staging a strong rebound, but we need the RSI to cross the 50% threshold level to confirm this expectation. In the meantime, we are keeping our positive trading bias.

We recommend traders maintain long positions. We initiated these 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.

The immediate support level is set at USD1,880 – the low of 29 Sep. This is followed by USD1,851, which is near 28 Sep’s low. Towards the upside, immediate resistance is at USD1,927 – around the 20-day SMA line – and followed by USD1,950.00.

Source: RHB Securities Research - 2 Oct 2020