Maintain short positions. The COMEX Gold pulled back USD2.80 to settle at USD1,719.80 – forming another lower high pattern. Last Friday, it gapped down USD2.10 to open at USD1,720.50 and continued falling towards the session’s low of USD1,696.60 before recovering during the late trading hours to close at USD1,719.80. Buying interest was strong near the physcological level of USD1,700, while the upside potential was capped by the immediate resistance level seen at USD1,728.80. As the RSI indicator broke out from its downtrend line, there is a possibility the commodity may retest the resistance level of USD1,728.80 in the coming sessions. Meanwhile, a breach below USD1,700 will see further downside correction and the resumption of a downward movement. We maintain our negative trading bias until the trailing-stop level is breached.

We recommend traders stick to short positions initiated at USD1,799, or the closing level of 16 Feb. For risk management purposes, the trailing-stop is revised to USD1,729.

The immediate support is revised to 10 Mar’s low of USD1,705.60, followed by 12 Mar’s low of USD1,696.60. Towards the upside, the resistance is pegged at 26 Feb’s closing of USD1,728.80, followed by USD1,738.

Source: RHB Securities Research - 15 Mar 2021