Maintain short positions. The COMEX Gold is trying to build interim support after Wednesday’s sell-off, when it rose USD5.00 to settle at USD1,913.60. The precious metal opened higher at USD1,921.50 yesterday, and tested the intraday high of USD1,929.60. However, selling pressure continued, with the commodity falling to the USD1,907.50 day low, and was last traded at USD1,913,60. We think the precious metal needs to consolidate further, as the RSI fell below the uptrend line, indicating that momentum is cooling off. On the bright side, the 20- day SMA line is trending higher, suggesting that in the longer term, we will still see an uptrend, and the current retracement is just a short term correction. As the correction phase has started, we keep our negative trading bias.

We recommend traders shift to short positions. We initiated these at USD1,908.60, or the closing level of 6 Jan. For risk-management purposes, we adjust the stop-loss to USD1,938.

Downside support is marked at USD1,878, followed by 22 Dec’s low of USD1,863.70. On the upside, the immediate resistance is pegged at USD1,938, followed by the next hurdle at 5 Dec’s USD1,954.40 close.

Source: RHB Securities Research - 8 Jan 2021