Gold prices remain under pressure despite a modest rebound at the end of last week, with RHB Research maintaining a bearish outlook as technical indicators continue to point to further downside.
In a commodities note, the research house said COMEX gold recovered US$20.60 on Friday to close at US$4,070.80 an ounce after selling pressure eased. The precious metal opened the session at US$4,053.40 and traded within a range of US$4,024 to US$4,085.20 before settling higher.
Despite the recovery, RHB noted that gold continues to trade below its 20-day simple moving average (SMA), while both the 20-day and 50-day SMA lines are trending lower, signalling that bearish momentum remains intact.
“The technical setup remains bearish, and the precious metal may stage another attempt to break below the key US$4,000 support level,” the research house said.
It added that the US$4,200 level continues to serve as immediate resistance, limiting any near-term upside for gold prices.
Given the prevailing technical outlook, RHB advised traders to maintain their existing short positions initiated at US$4,605.70, with a stop-loss set at US$4,400 to manage downside risks.
The research house identified US$4,000 as the first key support level, followed by US$3,850 should selling pressure intensify.
On the upside, resistance is expected at US$4,200, with a stronger resistance level at US$4,400.
Gold has experienced heightened volatility in recent weeks as investors continue to assess the outlook for global interest rates, geopolitical developments and safe-haven demand. However, RHB believes current price action suggests sellers remain in control, keeping the near-term bias tilted to the downside.
