Best stay short with the ongoing bearish bias. The COMEX Gold registered a USD9 loss to USD1,259.90 at the end of yesterday’s session. This formed a black candle that breached firmly below the previous USD1,263 support, which showed the session was led by the sellers. As a result, the commodity extended its downside movement to its newest low since 2017. We also noted that the 50-day SMA line dipped by USD1.81 to USD1,307.11 – an indication of deteriorating strength, which implies a weak outlook and enhances our bearish view.

As the bearish bias continues to extend itself, this implies that the bulls are still unable to take control of market sentiment. As such, we maintain our short recommendation. In order to secure part of the trading profits, traders are advised to keep the trailing-stop above the USD1,286 mark. This is in line with our initial short call below the USD1,309 level on 16 May.

The USD1,238 threshold, ie 12 Dec 2017’s low, is now our immediate support. This is followed by the USD1,217 support, which was obtained from the low of 9 May 2017. On the flip side, we set the immediate resistance at USD1,263 – this was at the low of 27 Oct 2017. If this level is taken out, the next resistance is pegged at USD1,286, or the low of 21 May.

Source: RHB Securities Research - 27 Jun 2018