Maintain short positions. The COMEX Gold consolidated sideways yesterday, retreating USD3.50 to settle at USD1,851.40. It gapped USD9.30 lower to open at USD1,845.60. Buying pressure was seen near the USD1,826.60 day low, while selling pressure capped the upside at USD1,857.60. While the precious metal is forming a consolidation base, we note that the 20-day SMA line is flattening, and we estimate that by 22 Jan, the line will curve downwards, and may exert further selling pressure. Thus far, the commodity is trading between the sideways zone of USD1,865.90 and USD1,827.80. The next five trading sessions wil be crucial to determine whether the prices breakout from either boundary of the zone. As the commodity 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 the trailing-stop at USD1,865.90.

Downside support is kept 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 eyed at 17 Dec 2020’s low of USD1,865.90, followed by USD1,889.40.

Source: RHB Securities Research - 15 Jan 2021