Stop loss triggered: Initiate long positions. The COMEX Gold saw positive price action yesterday, adding USD3.80 from the previous session to settle at USD1,859.10. The commodity opened flat, starting at USD1,857.70. The bulls overshadowed the bears, pushing the index towards the USD1,870 day high, and breaching the USD1,860 stop-loss. The commodity then saw profit-taking near the day high, moving lower to settle at USD1,859.10. Based on yesterday’s price action, positive momentum has picked up, as the RSI crossed the 50% threshold level. We think the momentum will continue, lifting the commodity to test the 50-day SMA line. As positive momentum has emerged, we switch to a positive trading bias.

Our previous short positions, initiated at USD1,838.50 or the closing level of 9 Dec, were closed out in the latest session, after triggering the USD1,860 stop loss. Concurrently, we initiated long positions. For risk-management purposes, a stop-loss can be set below the recent low of USD1,820.

Downside support is marked at 14 Dec’s low of USD1,820.00, followed by USD1,800. On the upside, the immediate resistance is pegged at the recent high of USD1,870, followed by USD1,879.80.

Source: RHB Securities Research - 17 Dec 2020