Opportunities still leaning more towards the sellers, keep short. The COMEX Gold posted a USD2.80 loss to USD1,261.40 at last Friday’s close. The commodity charted a black candle after having oscillated between a low of USD1,259.30 and high of USD1,264.50. We believe market sentiment remains weak, as – despite detecting a positive momentum in 4 Jul’s “Bullish Harami” candlestick pattern – no strong upside follow-though has been sighted. Technically speaking, the bearish bias is still pressing the COMEX Gold’s price. Overall, our downside view remains intact.

As long as we do not see a strong upside development, this implies the opportunities are still leaning more towards the sellers. As such, traders are advised to stay in short positions, with a trailing-stop set above the USD1,286 mark. This is in order to lock in some of the trading profit. Our short call was initially triggered below the USD1,309 threshold on 16 May.

To the downside, we set the immediate support at USD1,238, which was the low of 12 Dec 2017. If this level is taken, out, our next support is set at the USD1,217 threshold, or the low of 9 May 2017. Conversely, the immediate resistance is pegged at USD1,263, which is located at 27 Oct 2017’s low. This is followed by the USD1,286 resistance, ie the low of 21 May.

Source: RHB Securities Research - 9 Jul 2018