Maintain short positions. The COMEX Gold saw the negative momentum persist yesterday, declining USD9.50 to close at USD1,856.40. Although it started the session flat at USD1,867.80, it failed to go beyond the USD1,870.90 day high. The precious metal then saw a fresh round of selling during the US trading session, where it dropped to the USD1,853 session low and settled at USD1,856.40. Based on the latest session, the COMEX Gold is moving on “lower highs and lower lows”, extending the correction seen from the high of USD1,919.20. If it breaks the USD1,850-pt support level, expect a fresh “lower low” and see a deeper correction ahead. In the event selling pressure accelerates, it may correct towards the 50-day SMA line. On the upside, the 20-day SMA line will now act as resistance. Since it is under selling pressure, we retain our negative trading bias.

We recommend traders to maintain the short positions initiated at USD1,873.30, or the closing level of 3 Jun. For risk-management purposes, the stop-loss level is adjusted to USD1,900.

The immediate support is revised to USD1,850 and followed by USD1,830. Meanwhile, the nearest resistance is changed to 14 Jun’s high – USD1,879.70 – and followed by the USD1,900 psychological level.

Source: RHB Securities Research - 16 Jun 2021