Maintain short positions. The COMEX Gold slipped below the USD1,800 psychological level to settle at USD1,797.90. It opened flat at USD1,805, and attempted to stage a rebound towards the session’s high of USD1,813. However the effort was futile, as selling pressure emerged in the evening, dragging it towards the session’s low of USD1,782.30. The bulls struggled near the session’s low, lifting the commodity to pare some losses before closing at USD1,797.90. The USD1,800 level has become a crucial threshold to determine the index’s the next direction. Failure to reclaim the USD1,800 territory will see further downside risks. A “lower high” pattern formed yesterday, reaffirming our view that the commodity needs to breach USD1,815 to see a change of trend. As the precious metal is trending lower, we keep our negative trading bias.

We recommend traders keep to the short positions initiated at USD1,799, or the closing level of 16 Feb. For risk management purposes, the stop-loss is maintained at USD1,815.

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

Source: RHB Securities Research - 25 Feb 2021