Maintain long positions. The COMEX Gold swung between a low and high of USD1,885.30 and USD1,905.30, before closing USD4.30 higher at USD1,895.10. The positive performance came after the precious metal slid for two consecutive sessions on a failed attempt to breach above the 20-day SMA line, indicating the absence of a negative price follow-through to signal a confirmed price rejection from the said SMA line. Towards the downside, a breach of the USD1,880 support level would mark an end to the rebound phase that started from the recent low of USD1,851. 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.

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 pegged at the USD1,900 round figure, followed by USD1,927 – around the 20-day SMA line.

Source: RHB Securities Research - 9 Oct 2020