Maintain short positions. The COMEX Gold has consolidated along the 20-day SMA line, declining USD1.10 from the previous session to settle at USD1,837.40. The commodity opened the session at USD1,843, dipping to the day low at USD1,831.50. The bulls emerged near this low, pushing the price to test the day high at USD1,854.20. However, the bulls failed to hold on, and the COMEX Gold retraced lower to close at USD1,837.40. The precious metal is seen trading below the 20-day SMA line, and a failure to climb above the moving average will signal more corrections ahead. With the RSI trending below the 50% threshold level, we think the USD1,852.70 resistance will remain intact in the coming sessions. Until the upside stop loss level is breached, we maintain our negative trading bias.

We recommend traders switch to short positions. We initiated these at USD1,838.50, or the closing level of 9 Dec. For risk-management purposes, a stop loss can be set above the USD1,866 threshold.

Downside support remains at 7 Dec’s low, or USD1,824.80. This is followed by USD1,810.50. On the upside, the immediate resistance is pegged at the high of 4 Dec, ie USD1,852.70, and followed by USD1,879.80.

Source: RHB Securities Research - 11 Dec 2020