Maintain short positions. The COMEX Gold saw a volatile session on Monday, swinging USD35.50 intraday before settling at USD1,894. The precious metal started the session at USD1,893.70 – it then rose to a day high of USD1,904.30, breaching the resistance of USD1894.90. However, since the commodity touched the 20-day SMA line, the bulls started to book profits and the bears brought the commodity below the resistance level during mid-day. The commodity saw a sudden sell-down during 8pm local time, plunging from USD1,892 to the low of USD1,868.80. The bulls seized the opportunity to buy low and saw the commodity recoup all intraday losses, and closed at USD1,894. From the price action, the precious gold is forming a base near USD1,865. Meanwhile, since the upside resistance level remains intact, 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 immediate resistance is pegged at USD1,894.90 and followed by USD1,924, which was the high of 4 Nov

Source: RHB Securities Research - 17 Nov 2020