Maintain long positions. The COMEX Gold tried to stage a rebound yesterday, but buying interest was weak and it closed at USD1,882.90, merely adding USD2.50 from the previous session. It started the session at USD1,878 and tried several times to test the USD1,891.30 day high, but the selling pressure constrained it from going higher. Meanwhile, the bulls were absorbing the selling near the USD1,875.60 day low. From the recent price action, the COMEX Gold is seen consolidating near the 50-day SMA line. As long as it can trade above the 20-day SMA line, we deem the counter-trend rebound as intact. We also expect the 20-day SMA line to cross over the 50-day SMA line as soon as the next three sessions. As such, we maintain our positive trading bias.

We recommend traders maintain long positions. We initiated long positions at USD1,859.10, or the closing level of 16 Dec. For risk-management purposes, we adjust the stop loss higher to USD1,859.

The downside support remains at the recent low of USD1,859, followed by USD1,820. On the upside, the immediate resistance is pegged at the high of 18 Dec – USD1,895.70 – and followed by USD1,912.20.

Source: RHB Securities Research - 30 Dec 2020