Maintain long positions. The COMEX Gold saw consolidation near the 20-day SMA line, falling USD1.10 to settle at USD1,840. The commodity had a positive opening on Friday, gapping USD3.60 to start the session at USD1,844.70. It traded flat or sideways for most of the session until the second half, when we saw a volatile swing. From the USD1,8844.70 level, the COMEX Gold jumped to the USD1,852.70 high and slammed to the session low of USD1,832 before it settled at USD1,840. As mentioned previously, the precious metal is prone to seeing profit takings at USD1,847. Since the RSI is still hovering below 50%, the commodity will take some time to consolidate near the USD1,826.70 level before it can challenge the 20-day SMA line. We still think the recent rebound has not ended yet – hence, we maintain our positive trading bias.

We recommend traders maintain long positions. We initiated such positions at USD1,818.90, or the closing level of 1 Dec. For risk-management purposes, a trailing stop can be set below the USD1,825 threshold.

The downside support is marked at 3 Dec’s low, ie USD1,826.70. This is followed by the USD1,767.20 level. On the upside, the immediate resistance is pegged at USD1,854 and followed by USD1,864.

Source: RHB Securities Research - 7 Dec 2020