Maintain short positions. The COMEX Gold saw further selling pressure on Friday, plunging below USD1,800 to settle at USD1,788.10. The precious metal started the session flat, opening at USD1,812.10. It attempted to stage a rebound, and rose to test the session high of US1,822.60. However, the bulls were jittery and away from the market, resulting in the commodity turning south, smashing the physcological level of USD1,800 and reaching the day low of USD1,776.50. As expected, negative momentum is gripping the commodity, heading lower to test the support level, and there are no signs of reversal so far. If the RSI indicator falls to oversold levels in coming sessions, we may see a short-term technical rebound. As long as the immediate resistance level is intact, we will 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, and to protect profit, a trailing stop can be set above the USD1,830 mark.

Downside support is seen at the recent low USD1,776.50, followed by the USD1,760 round figure. On the upside, immediate resistance is pegged at the recent high of USD1,822.60, followed by the USD1,850 round figure.

Source: RHB Securities Research - 30 Nov 2020