Maintain short positions. The COMEX Gold consolidated near the support level, adding USD10.30 to settle at USD1,840.20. It opened flat at USD1,828.80 and fell towards USD1,800.80 – the day’s low, testing the physcological level of USD1,800. Buyers seized the oppportunity, which caused the commodity to swing back towards the day’s high of USD1,845 to close at USD1,840.20. Although the last five sessions displayed a lower highs and lower lows pattern, the downside support of USD1,827.80 remained intact, with the bulls not relenting. The commodity hovered between the resistance and support for a sideways consolidation. In a bigger picture, the 50-day SMA line is trending lower. The commodity needs to breach the nearest resistance of USD1,864 to change the course of the downtrend correction. Until that happens, we maintain our negative trading bias.

We recommend traders stick to short positions. We initiated these at USD1,908.60, or the closing level of 6 Jan. For risk-management purposes, we adjust the trailing stop to USD1,864.

Downside supports are maintained at 8 Jan’s low of USD1,827.80 and 2 Dec 2020’s USD1,810.50 low. On the upside, the immediate resistance is pegged at 12 Jan’s high of USD1,864, followed by USD1,889.40.

Source: RHB Securities Research - 20 Jan 2021