Maintain short positions. The COMEX Gold saw another muted session yesterday, rising USD10.70 to settle at USD1,854.90. The precious metal gapped USD10.80 higher to open at USD1,855 – rising to a day high of USD1,863. Despiste a positive price action during the early session, selling pressure emerged later during the day and dragged prices to a day low of 1,841.60 – it closed at USD1,854.90. Combining the price actions of the last three sessions, the bulls and bears were both at equal strength – consolidating near USD1,850. We think the precious metal will trade in-between the resistance and support levels of USD1,865.90 and USD1,827.80. A breakout of either boundary will see a new trend forming. Since the COMEX Gold is trading below the 50-day SMA line, we maintain our negative trading bias.

We recommend traders maintain short positions. We initiated these at USD1,908.60, or the closing level of 6 Jan. For risk-management purposes, we set a stop loss at USD1,865.90.

Downside supports are marked at 8 Jan’s low of USD1,827.80 and 2 Dec 2020’s low of USD1,810.50. On the upside, the immediate resistance is pegged at 17 Dec 2020’s low of USD1,865.90 and followed by USD1,889.40

Source: RHB Securities Research - 14 Jan 2021