Maintain short positions. The COMEX Gold continued its downward movement last Friday, retreating USD0.60 to settle at USD1,767.70. It started the session at USD1,772.40 before testing the day’s high of USD1,773.30. It managed to find an intraday low at USD1,763.30, and rebounded to close at USD1,767.70. The commodity is trying to establish a support level near the 20-day SMA line. Although we do see a “higher low” formation when combining last Thursday and Friday’s sessions, we have yet to see a follow-through price action or bullish candlestick to confirm the reversal near the 20-day SMA line. As such, the commodity is likely to trend lower to test the USD1,761.80 level, until a bullish candlestick emerges. We stick to a negative trading bias.

We recommend traders maintain the short positions initiated at 29 Apr’s close of USD1,768.30. For risk management, the stop-loss is revised to USD1,790.

The immediate support is marked at 28 Apr’s low of USD1,761.80, followed by the USD1,750 round figure. Towards the upside, the nearest resistance is pegged at USD1,785, followed by USD1,795.

Source: RHB Securities Research - 3 May 2021