Maintain short positions. The COMEX Gold saw a long lower shadow candlestick pattern yesterday, gaining USD10.60 to settle at USD1,733.60. The precious metal initially opened flat at USD1,722.80 and fell to the day low of USD1,704.60. Before it could breach the USD1,700 support, buying pressure emerged and saw the commodity rebounding towards the USD1,737.80 day high – it closed at USD1,733.60. The COMEX Gold has been making a lower high and low formation for the last five sessions. With the latest long lower shadow pattern, the current downtrend may take a pause and consolidate. If the buying pressure follows through, it may test the USD1,750 resistance level. Meanwhile, a breach below USD1,700 will see a further extension of the current downtrend. Until the trailing-stop is triggered, we maintain our negative trading bias.

We recommend traders stick to the short positions initiated at USD1,799, or the closing level of 16 Feb. For riskmanagement purposes, a trailing stop can be set above the USD1,763 threshold.

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

Source: RHB Securities Research - 3 Mar 2021