Initiate long positions, as the resistance level has been breached. The COMEX Gold climbed up USD17.70 during Tuesday’s session and closed at USD1,917.40 – a level above the 20-day SMA line. The precious metal started the session at USD1,903.40, briefly trading at the USD1,895.40 session low, before rebounding towards the USD1,919 session high. With the RSI swinging above the 50% threshold, we think the positive momentum is picking up, and there is a possibility the COMEX Gold will challenge the 50-day SMA line boundary. If the precious metal can trade above the USD1,900 level in the coming three sessions, we foresee the 20-day SMA line curving up and acting as support. As such, we switch our negative trading bias to a positive one.

Our previous short positions – initiated at USD1,879.20, or the closing level of 28 Oct – were closed out at USD1,917.30 during the latest session. Concurrently, we initiate long positions. For risk-management purposes, a stop-loss is placed at USD1,866.70, ie the low of 29 Oct.

The downside support is marked at USD1,881 – 2 Nov’s low – and followed by USD1,866.70. On the upside, the resistance point is seen at USD1,924, or the recent high, and followed by the USD1,936 threshold.

Source: RHB Securities Research - 4 Nov 2020