Maintain short positions. The COMEX Gold bears are taking a breather, recovering USD2.20 to settle at USD1,775. Following a sell-off on Wednesday, the commodity rebounded mildly to open at USD1,776. After touching the day high at USD1,788.80 and USD1,766.60 day low, it closed at USD1,775 with a Doji pattern – the bulls and bears were at equal strength. Both the 20- and 50-day SMA lines point downwards, indicating that the COMEX Gold is potentially moving lower under a bearish trend. However, the precious metal is trading far apart from the 20-day SMA line – there might be a technical rebound in coming sessions to test the USD1,800 physcological level. As long as the stop level stays intact, we maintain our negative trading bias.

We recommend traders maintain short positions initiated at USD1,799, or the closing level of 16 Feb. For riskmanagement purposes, the stop loss is adjusted to USD1,815.

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

Source: RHB Securities Research - 19 Feb 2021