Maintain short positions. The COMEX Gold saw some early positive signs last Friday, touching the USD1894.90 immediate resistance before settling at USD1,893. The precious metal started the session at USD1,883 – it then dipped to the USD1,878.80 low before bouncing to the USD1,902.40 high. Shortly after that, it pulled back below the resistance level and stayed under for the rest of session. With the RSI indicator still trending below the 50% threshold, we see the COMEX Gold bouncing between USD1,894.90 and USD1,868.10 until a consolidation base is formed. If the commodity jumps above the immediate resistance, the bulls will see overhead resistance at the 20- and 50-day SMA lines. With the immediate resistance proving to be still formidable, we maintain our negative trading bias.

We recommend traders maintain short positions. We initiated these at USD1,860.60, ie 9 Nov’s closing level. For risk-management purposes, the stop-loss can be set above USD1,895.40, or the low of 3 Nov.

The downside support is marked at USD1,860.20 and followed by USD1,851, ie the low of 24 Sep. On the upside, the resistance is pegged at the recent USD1,894.90 high and followed by USD1,924, which was the high of 4 Nov.

Source: RHB Securities Research - 16 Nov 2020