Maintain long positions. The COMEX Gold traded in a wide range of USD1,878.20 and USD1,927 in the latest session, in the process attempting to break into the resistance zone that consists of the 20- and 50-day SMA lines. Recall that we have been expecting the commodity’s rebound to, at the minimum, retest the said zone. The failure to do so in the latest session is indicating some struggling by the bulls in extending the commodity’s rebound. However, to confirm a price rejection from the said resistance zone, further negative price actions need to be observed in the coming sessions. For now, 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, a stop-loss can now be placed below USD1,880.

The immediate support level is maintained at USD1,880 – the low of 29 Sep. This is followed by USD1,851, which is near 28 Sep’s low. Conversely, the immediate resistance is set at USD1,927 – around the 20-day SMA line. This is followed by USD1,950.

Source: RHB Securities Research - 7 Oct 2020