Maintain short positions. The COMEX Gold reversed to negative momentum, falling USD10.30 to settle at USD1,794.60 yesterday – with sharp profit-taking below the 50-day average line. It opened slightly lower at USD1,800.20 and climbed to the intraday high of USD1,804.60 halfway through the Asian trading session. Bearish momentum then kicked in, and the index declined for the rest of the session. It touched the intraday low of USD1,789 before rebounding mildly at the close. The black body candlestick, printed below the 50-day average line yesterday, suggest that the recent buying pressure has receded – and could retreat further below the USD1,800 level. Nevertheless, as the RSI is still above the 50% level, we expect the index to trade sideways below the USD1,800 immediate resistance before potentially rebounding. We keep our negative trading bias until the revised stop-loss is breached.

We advise traders to stick with the short positions initiated at USD1,809, or the closing level of 22 Nov. For risk management, the stop-loss is revised lower to the USD1,815.70 resistance. The immediate support is set at USD1,762.20 – 2 Dec’s low – followed by USD1,721.10, which was 29 Sep’s low. On the upside, the nearest resistance is pegged at the USD1,800 threshold, followed by USD1,815.70 – 17 Dec’s high.

Source: RHB Securities Research - 21 Dec 2021