Maintain short positions. The COMEX Gold is moving along the 20-day SMA line, having rebounded USD6.20 from the previous session to settle at USD1,843.60. It began the session at USD1,840, with selling pressure emerging right from the start, pushing the precious metal to the day low of USD1,826.80. Halfway through the session, buying pressure emerged near the day low, lifting it to the day high of USD1,851.80, before settling at USD1,843.60. While the precious metal has been trading along the 20-day SMA line, the moving average is heading lower, as the RSI momentum indicator has fallen below 50%, indicating negative momentum ahead. With the overhead resistance of USD1,852.70 still intact, we think the precious metal will eventually move lower to test the support levels. As long as the resistance level stays intact, we will maintain our negative trading bias.

We recommend traders maintain 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 of USD1,824.80. This is followed by USD1,810.50. On the upside, the immediate resistance is pegged at the high of 4 Dec, or USD1,852.70, followed by USD1,879.80.

Source: RHB Securities Research - 14 Dec 2020