Maintain long positions. The COMEX Gold’s momentum softened yesterday, retracing USD18.00 lower to settle at USD1,864.80. The commodity opened flat at USD1,883, with the precious metal briefly trading at the USD1,889.40 high, before selling pressure dragged it to the day low at USD1,863.70 – it closed near this low at USD1,864.80. The COMEX Gold has fallen back beneath the 50-day SMA line after three sessions of consecutive corrections. This showed that the major downtrend, which started in September with a Bearish Crossover, remains valid. Despite a weaker performance lately, we will closely monitor the the gap between the 20- and 50-day SMA lines to see if it can narrow in upcoming sessions. As long as the downside stop level is intact, we stick to our positive trading bias.

We recommend traders maintain long positions. We initiated long positions at USD1,859.10, or 16 Dec’s closing level. For risk-management purposes, a stop loss can be set below the USD1,848 mark.

Downside support remains at the recent USD1,859 low and followed by USD1,820. On the upside, the immediate resistance is pegged at 18 Dec’s high – USD1,895.70 – and followed by the high of 3 Nov, USD1,912.20.

Source: RHB Securities Research - 23 Dec 2020