Maintain long positions. The COMEX Gold saw another positive price action yesterday, rising USD31.30 from the previous session to settle at USD1,890.40. It had a strong opening, gapping USD9.30 to kickstart at USD1,868.40. Since the start of the session, the bulls drove it towards the day high of USD1,902 – breaching the USD1,900 physcological level. The COMEX Gold then saw profit-taking, retracing lower to settle at USD1,890.40. Since September’s Bearish Crossover of moving averages, this is the second time the commodity traded above the 50-day SMA line. For the coming sessions, we think there might be some pullback to consolidate the price before it extends further. As long as the downside support is intact, we maintain our positive trading bias.

We recommend traders switch to long positions. We initiated long positions at USD1,859.10, or the closing level of 16 Dec. For risk-management purposes, a stop loss can be set below the recent low of USD1,828.

Downside support is marked at the USD1,850 round figure and followed by USD1,820. On the upside, the immediate resistance is pegged at 16 Nov’s high – USD1,898 – and followed by the high of 3 Nov, ie USD1,912.20.

Source: RHB Securities Research - 18 Dec 2020