Traders are advised to stay in short positions, as market sentiment remains weak. The COMEX Gold ended at USD1,256.70 last night and posted a USD0.60 gain. However, this does not change our negative view, as no strong upside development has been sighted yet. From our technical perspective, this minor increase was due to the commodity taking a breather, which is a normal reaction after having dropped to its YTD low on 27 Jun. Overall, market sentiment remains weak. This is also supported by the COMEX Gold trading firmly below the 50- day SMA line, which points towards a weak outlook.

Until a strong upside development is visible in the daily chart, we believe the opportunities are still leaning more towards the sellers. As such, there is no change to our short call, and advise the setting up of a trailing-stop above the USD1,286 mark. This is to ensure that part of the trading profits is locked in. Recall that our initial short call was triggered below the USD1,309 threshold on 16 May.

We keep the immediate support at USD1,238, which was the low of 12 Dec 2017. The next support is pegged at the USD1,217 threshold, or the low of 9 May 2017. Towards the upside, the immediate resistance is pegged at USD1,263, which was obtained from 27 Oct 2017’s low. Should the COMEX Gold breach above this level, the following resistance is found at USD1,286, ie the low of 21 May.

Source: RHB Securities Research - 29 Jun 2018