Gold prices extended their decline on Thursday, with COMEX gold futures falling US$59.70 to close at US$3,992.10 an ounce, slipping below the psychologically important US$4,000 level as bearish momentum accelerated, according to RHB Research.
The precious metal opened the session at US$4,068.90 before trading within a range of US$4,071.90 to US$3,973.40. It eventually settled at US$3,992.10, marking another weak session for the yellow metal.
RHB said the latest price action reinforces a negative technical outlook, with gold now trading firmly below both its 20-day and 50-day simple moving average (SMA) lines.
The research house also noted that the Relative Strength Index (RSI) continues to trend lower below the 50% level, signalling that downside momentum is gathering pace.
“We observed the RSI trending lower beneath the 50% mark, indicating negative momentum is now increasing speed,” RHB said in its technical analysis.
The research house expects gold prices to remain under pressure in the near term, forecasting a further decline towards the US$3,850 support level before the market is likely to establish a consolidation base following the breach of the US$4,000 threshold.
Despite the recent sell-off, RHB believes the current downtrend remains intact and has maintained its bearish trading bias.
The firm recommended that traders continue holding short positions initiated at US$4,605.70, the closing price on March 19, while setting a stop-loss level at US$4,400 to manage downside risk.
From a technical perspective, immediate support is seen at US$3,850, followed by a stronger support level at US$3,700. On the upside, resistance is expected at US$4,200, with a stronger resistance level at US$4,400.
Gold has remained volatile in recent weeks as investors continue to reassess the outlook for US interest rates, global inflation and geopolitical developments. Higher bond yields and a firmer US dollar have also weighed on bullion prices, reducing the appeal of the non-yielding asset.
For now, RHB believes the technical indicators suggest that sellers remain firmly in control, with further downside likely unless gold manages to reclaim key resistance levels.
