RHB Research has turned bearish on COMEX gold after the precious metal breached its US$4,300 stop-loss level and closed at US$4,284.80 on Sept 23.
The research house said the break below the key support level reinforced its view that support tends to be weak when a bearish technical setup is in place.
COMEX gold opened at US$4,363.10 before falling to a low of US$4,277.60 and briefly rebounding to an intraday high of US$4,374.00. It subsequently closed at US$4,284.80.
RHB expects the bearish momentum to continue, with gold potentially forming fresh lower lows and lower highs. The commodity could retrace towards US$4,150, followed by the US$4,000 level.
The research house also noted that the 20-day and 50-day simple moving averages remain overhead resistance, limiting the upside.
Following the stop-loss trigger, RHB closed its long position initiated at US$4,273.30 and shifted to a negative trading bias.
It has instead initiated a short position at US$4,284.80, based on the Sept 23 close, with a stop-loss at US$4,700.
RHB identified US$4,150 as the first support level, followed by US$4,000, while resistance is seen at US$4,500 and US$4,700.
