Maintain short positions. The COMEX Gold is resuming the downtrend that started with the Bearish Crossover of the 20- and 50-day SMA lines, declining USD26.20 to settle at USD1,772.80. Yesterday, the commodity gapped down to open at USD1,793.10. After rebounding to the day’s high of USD1,794.20, it fell to the USD1,767.90 day-low, and closed at USD1,772.80. This is the third time the COMEX Gold has fallen below the USD1,800 psychological level, in the last three months. If it fails to reclaim the USD1,800 threshold in the coming sessions, we expect heightened selling pressure to drag the index down towards USD1,756 and USD1,739. As the commodity is trending on “lower highs” and “lower lows” patterns, we maintain our negative trading bias.

We recommend traders shift to the short positions initiated at USD1,799 or the closing level of 16 Feb. For risk management purposes, the stop-loss is set at USD1,825.

The immediate support is marked at USD1,756, followed by USD1,739. Towards the upside, the nearest resistance is pegged at the USD1,800 round figure, followed by USD1,815.

Source: RHB Securities Research - 18 Feb 2021