Maintain short positions. The COMEX Gold saw a strong rebound yesterday, rising USD21.60 to settle at USD1,753.30. It started Wednesday’s session flat at USD1,730.40. After reaching its USD1,724.60 day low, the commodity reversed and progressed higher. The momentum further accelearated during the US trading hours, where it touched the USD1,756.70 day high before the close. Underpinned by the strong momentum, the yellow metal may see a follow though that tests the USD1,765.70 immediate resistance. Breaching this will negate the bearish candlestick on 9 Aug, which will see the COMEX Gold rally higher. We expect selling pressure to merge near this resistance level. As such, we maintain our negative trading bias until the stop-loss level is breached.

We recommend traders maintain the short positions initiated at the close of 6 Aug, or USD1,763.10. To mitigate trading risks, the initial stop-loss threshold is placed at USD1,770.

The immediate support level is marked at USD1,718.50 – 10 Aug’s low – and followed by USD1,677.90, ie 9 Aug’s low. Conversely, the nearest resistance is pegged at USD1,765.70 – 9 Aug’s high – followed by the USD1,790 round figure.

Source: RHB Securities Research - 12 Aug 2021