Maintain short positions. After a sell-off in the previous week, the COMEX Gold managed to establish a foothold near the 1,750-pt support level. It rebounded with a long lower shadow to settle at USD1,783.30. Last week, the index started at USD1,782 on Monday, and fell to a USD1,750.10 low. Strong buying interest emerged near the low, lifting it to retest the USD1,795.90 high before ending the week at USD1,783.30. Based on the price action, negative momentum failed to follow through, as the selling pressure subsided. Hence, we expect a strong support to form at USD1,750, and the technical rebound may extend – if the USD1,790 resistance level is breached. Until the bullish momentum or upward movement is confirmed, we stick to our negative trading bias.

We recommend traders hold on to the short positions initiated at USD1,873.30, or the closing level of 3 Jun. To manage risks, the trailing-stop level is set at USD1,790.

In the daily chart, the immediate support is marked at USD1,763, followed by the USD1,750 round figure. The immediate resistance is eyed at USD1,790, while the higher hurdle remains at USD1,826.40, or 17 Jun’s high.

Source: RHB Securities Research - 5 Jul 2021