Maintain long positions. The COMEX Gold continues to see strong demand, rising USD7.80 to close at USD1,954.40. The precious metal opened at USD1,946 yesterday and retraced to the USD1,938.40 day low. Buying interest emerged near this low, which sent the commodity towards the day high of USD1,957 – it last traded at USD1,954.40. Based on the last 10 trading days, the average trading range (ATR) works out to USD10.30. By extrapolating 2x ATR from the last price – USD1,954.40 – we should see upside resistance at USD1,975. Downside support is at USD1,933.80. Since the WTI Crude is trading at a level far away from both the 20- and 50-day SMA lines, we will not rule out the possibility that the bulls might profit-take in the coming sessions. As long as the downside support stays intact, we maintain our positive trading bias.

We recommend traders maintain long positions. We initiated these at USD1,859.10, or the closing level of 16 Dec 2020. For risk-management and profit-protection purposes, a trailing-stop can be set below the USD1,928 level.

Downside support is marked at USD1,933.80 and followed by the USD1,900 round figure. On the upside, the immediate resistance is pegged at 9 Nov’s high of USD1,966.10 and followed by the next hurdle at USD1,975.

Source: RHB Securities Research - 6 Jan 2021