Maintain long positions. The COMEX Gold moved steadily higher on Tuesday, extending the V-shape rebound that is heading towards the 50-day SMA line. The precious metal added USD8.90 from Monday’s session to settle at USD1,874.90. During the intraday period, the commodity saw selling pressure fully absorbed at the USD1,863.90 low. Meanwhile, there was mild profit-taking near the USD1,879.80 high. As the RSI indicator has crossed the 50% threshold, we see the momentum gaining traction and it is on track to test the next resistance near the 50-day SMA line. Without any signs of a slowdown, we keep to our positive trading bias.

We recommend traders stick to long positions. We initiated such positions at USD1,818.90, or the closing level of 1 Dec. For risk-management purposes and profit protection, we revise the trailing stop higher to USD1,840.

The downside support remained at 4 Dec’s high, ie USD1,852.70. This is followed by the USD1,825 mark. On the upside, the immediate resistance is sighted at 20 Nov’s high – USD1,884.70 – and followed by USD1,898.90.

Source: RHB Securities Research - 9 Dec 2020