Maintain short, as the bearish bias remains in play. The COMEX Gold ended yesterday’s session at USD1,261.10, or USD4.20 lower from its prior USD1,265.30 close. As a result, it left a black candle that breached below the previous USD1,263 support. We believe market sentiment remains weak. Although an upside reversal signal was seen in 4 Jul’s “Bullish Harami” candlestick pattern, no strong positive follow-through has been detected. From our technical perspective, the bearish bias has not been fully negated yet.

As the current correction has not found a strong bottom, this implies that opportunities are leaning more towards the sellers. As such, we make no change to our short recommendation, with a trailing-stop set above the USD1,286 threshold – this is to secure part of the trading profits. Recall that our short call was initially triggered below the USD1,309 mark on 16 May.

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

Source: RHB Securities Research - 11 Jul 2018