The short call stays intact, as the bears are in firm control. The COMEX Gold ended USD1.80 lower to USD1,268.90 at the end of yesterday’s session and left a black candle. This weak performance showed that the bullish bias we saw in the prior session has not continued. We believe the bears are presently in firm control of market sentiment. We also highlight that the 50-day SMA line has dipped by USD1.58 to USD1,308.92. This implies a weak outlook ahead, thereby enhancing our bearish view.

As the bearish bias continues to exert itself, this indicates that the correction is not at its limit yet. From our technical viewpoint, it is best that traders maintain short positions, with a trailing-stop pegged above USD1,286. This is in order to secure part of the trading profits. For the record, we made the short recommendation below the USD1,309 threshold on 16 May.

Our immediate support is kept at USD1,263, which was derived from the low of 27 Oct 2017. If this level is taken out, the next support is pegged at the USD1,238 threshold – this is located at 12 Dec 2017’s low. Towards the upside, the immediate resistance is found at USD1,286, or the low of 21 May. This is followed by the USD1,309 resistance, which was the low of 8 Feb.

Source: RHB Securities Research - 26 Jun 2018