Maintain short positions. The COMEX Gold saw another heavy selling session on Tuesday, declining USD33.20 to settle at USD1,810.90. The precious metal started the session with a flat opening at USD1,842.60. The commodity then saw a repeating pattern by the bears, breaching the support level of USD1,820 at 6PM local time and reaching the low of USD1,803.70. With the latest price action, the bears are gripping the commodity with a higher trading range, and it may breach the psychological support level of USD1,800 in the coming sessions. If this happens, expect the commodity to re-test the level at mid-May c.USD1,787. The downtrend that started since the bearish crossover of moving averages will be extending until we see a firm reversal or breaching of the immediate resistance. Meanwhile, we maintain our negative trading bias.

We recommend traders hold on to short positions. We initiated these at USD1,860.60 on 9 Nov. For riskmanagement purposes, a trailing stop can be set above USD1,838.

The downside support is marked at the round figure of USD1,800, followed by USD1,787.50 – the high of 18 May. On the upside, the immediate resistance is pegged at USD1,830, followed by USD1,880.70, ie the high of 23 Nov.

Source: RHB Securities Research - 25 Nov 2020