Maintain short positions. The COMEX Gold failed to stage a meaningful rebound, declining USD5.80 to settle at USD1,723. The precious metal rose to the session’s high of USD1,757.40 after opening at USD1,732.80. However, its intraday gains were erased, retracing to the session’s USD1,717.20 low. After a lacklustre performance, it closed at USD1,723. As mentioned in our previous note, the precious metal is searching for its interim low. Without a “long shadow” formation or reversal pattern, it may continue to move lower, by forming a “lower lows” pattern. Coupled with the 20- and 50-day SMA lines trending lower, we think the commodity may face persistent selling pressure ahead. Based on the latest price actions, a significant resistance level is seen at USD1,750. Until the trailing-stop is triggered, we will maintain our negative trading bias.

We recommend traders maintain short positions. These were initiated at USD1,799, or the closing level of 16 Feb. For risk management purposes, the trailing-stop is placed at USD1,763.

The immediate support is marked at 26 Feb’s low of USD1,714.90, followed by the USD1,700 round figure. Towards the upside, the resistance is pegged at USD1,750, followed by USD1,780.

Source: RHB Securities Research - 2 Mar 2021