Maintain short positions. The COMEX Gold rebounded slightly during Friday’s session – however, throughout the week, it did go USD18.00 cheaper. The precious metal started the session at USD1,875.10 – briefly trading at the session low of USD1,871.10 – before rebounding towards the session high at USD1,897.90. The COMEX Gold later retraced USD10.70 from the session high to close at USD1,887.20. Based on the current price trend, the 50-day SMA line is heading lower, exerting selling pressure on the precious metal. The next four trading sessions will be crucial, in our view, as the 20-day SMA line is starting to curve lower. A failure to rebound above the resistance will indicate more downside risk. As both moving averages are showing bearish tones, we maintain our negative trading bias.

We recommend traders switch to short positions. We initiated these at USD1,879.20, ie the closing level of 28 Oct. For risk-management purposes, a stop-loss is set at USD1,917.30, or the high of 23 Oct.

The downside support is sighted at USD1,866.70 and followed by USD1,851, which was 24 Sep’s low. On the upside, the resistance point is marked at USD1,917.30 and followed by USD1,936, or the high of 21 Oct.

Source: RHB Securities Research - 2 Nov 2020