Maintain short positions. After falling into oversold territory, the COMEX Gold saw a sharp rebound yesterday, jumping USD38.90 to settle at USD1,716.90. The commodity started Tuesday’s session at USD1,679.30 and dipped to the session low of USD1,676.70. However, strong demand for the precious metal throughout this session lifted prices towards the session high at USD1,718.70. We also observed the RSI indicator curving up to test the downtrend line, indicating that short-term bullish momentum was buiding up. If the current momentum continues on and pierces through the USD1,739.10 resistance, the COMEX Gold may move higher to test the 20- day SMA line. Before that can happen, we think the commodity will consolidate near the USD1,700 level to build an interim base. As long as the trailing stop stays intact, we will 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, the trailing stop is set at USD1,725.

The immediate support is revised to USD1,700, followed by USD1,665. Towards the upside, the resistance is pegged at 4 Mar’s high of USD1,721.60 and followed by 3 Mar’s USD1,739.10 high.

Source: RHB Securities Research - 10 Mar 2021