More opportunities for sellers, keep in short positions. The COMEX Gold ended at USD1,244.80 and registered a USD1.60 decline last night. It charted a black candle after oscillating between a low of USD1,243.70 and high of USD1,250.60. Should the weak performance extend and breach below USD1,238 in later sessions, it will be the end of the positive momentum we detected in 14 Jul’s “Bullish Harami” candlestick pattern. Overall, our bearish view remains intact. This is supported by the fact that the 14-day RSI indicator is situated below the 50-pt neutral level at 31.75 pts, which implies that market sentiment is weak.

As the commodity continues to slip lower, it reflects more opportunities for sellers. Technically speaking, it is best that traders maintain short positions. We also advise setting a trailing-stop pegged at above the USD1,272 mark, so that part of the trading profits are locked in. This is in line with our initial short call below the USD1,309 mark on 16 May.

Our immediate support is maintained at USD1,238, which is located at 12 Dec 2017’s low. In the event the COMEX Gold’s price slips below this level, the following support is set at USD1,217, which was the low of 9 May 2017. Conversely, the immediate resistance is at USD1,272, or 9 Jul’s high. For the next resistance, look to USD1,286, ie 21 May’s low.

Source: RHB Securities Research - 17 Jul 2018