Maintain short positions. The COMEX Gold saw another massive sell-off session last Friday, plunging USD78.20 to settle at USD1,835.40. It started on a weak note, gapping lower to open at USD1,915.20. The precious metal tried to rebound higher during the early session, touching the USD1,918.40 day high, but failed to build an interim base. This saw investors dumping the commodity towards the USD1,827.80 day low. It last traded at USD1,835.40. The latest price action reaffirms our view: The correction phase has indeed kickstarted. The RSI falling below the trendline also indicates the momentum turning negative. With the COMEX Gold trading below both the 20- and 50-day SMA lines, we expect more downside risks. Hence, we keep our negative trading bias.

We recommend traders to maintain short positions. We initiated these at USD1,908.60, or the closing level of 6 Jan. For risk-management purposes and profit protection, we set the trailing-stop at USD1,965.90.

Downside support is marked at 2 Dec’s low of USD1,810.50 and followed by 30 Nov’s high of USD1,793.30. On the upside, the immediate resistance is pegged at 17 Dec’s low of USD1,965.90 and followed by the next hurdle at 22 Dec’s high of USD1,889.40.

Source: RHB Securities Research - 11 Jan 2021