Keep in short positions, in line with our bearish view. The COMEX Gold closed yesterday’s session at USD1,304.70 and registered a USD1.80 loss. During the session, the commodity rose to its intraday high of USD1,344.50 and tested the USD1,309 pts level before the bullish bias slowed down. This implies that the bulls are still unable to take control from the bears. This is supported by the fact that the 14-day RSI indicator is currently situated below the 50-pt neutral level at 44.03 pts – an indication that market sentiment is lacking strength. Overall, our bearish view remains in play.

The daily chart above suggests that opportunities are leaning more towards the sellers. As such, traders are advised to stay in short positions. For risk-minimisation purposes, we advise setting a stop-loss above the USD1,331 threshold. Recall that our short call was made on 16 May after a strong bearish movement below the USD1,309 mark.

The USD1,286 threshold, ie 21 May’s low, is still our immediate support. Should the COMEX Gold slip below this level, the next support is seen at USD1,263, or the low of 27 Nov 2017. Conversely, the immediate resistance is set at USD1,309, which was the low of 8 Feb. The following resistance is set at the USD1,331 mark – this is located at the high of 4 Jan.

Source: RHB Securities Research - 1 Jun 2018