Stay in short positions, as bears are still dominating market sentiment. Last Friday was a bullish session for the COMEX Gold, as it rebounded by USD0.20 to USD1,270.70. It left a white candle after oscillating between a low of USD1,268.40 and high of USD1,273.10. This positive performance was within our expectation, after we saw the longer lower shadow in the prior white candle, which indicated that positive momentum is accumulating. However, until a firm upside development is in sight, we believe the correction is still in play. At this juncture, bears are still dominating market sentiment.

Based on the current technical landscape, we believe the current correction is still ongoing. As such, we advise traders to stay in short positions with a trailing-stop pegged above USD1,286. This is lock in part of the trading profit. Recall that our short recommendation was triggered on 16 May, following a strong downside development below USD1,309.

To the downside, the immediate support is maintained at USD1,263, which is located at the low of 27 Oct 2017. Should the COMEX Gold’s price dip below this level, the following support is found at USD1,238, which was the low of 12 Dec 2017. Conversely, we keep the immediate resistance at USD1,286, ie 21 May’s low. For the next resistance, look to USD1,309, or 8 Feb’s low.

Source: RHB Securities Research - 25 Jun 2018