Maintain short positions in line with ongoing bearish bias. At last Friday’s closing, the COMEX Gold posted a USD3.20 gain to USD1,218.10. It charted a white candle that breached above the previous USD1,215 resistance. Nevertheless, this does not change our bearish view, as no strong upside development was sighted. At this juncture, the bears are still dominating market sentiment. In addition, we note that the 14-day RSI indicator continues to fluctuate below the 50-pt neutral level at 30.80 pts. This implies a weak outlook, thereby enhancing our downside view.

The daily chart above shows that the ongoing bearish bias could still be extended further. Thus, we reiterate our short call. In order to secure part of the trading profits, traders are advised to set a new trailing-stop above the USD1,240 threshold. For the record, our short call was initially triggered on 16 May, after the commodity dropped firmly below USD1,309.

Our immediate support is now at USD1,215, or the low of 20 Jul’s Bullish Engulfing” pattern. If this level is taken out, the following support is found at USD1,207, which was the low of 10 Jul 2017. Conversely, we revise the immediate resistance to USD1,240, ie near the high of 26 Jul. This is followed by the next resistance at the USD1,272 mark, or the high of 9 Jul.

Source: RHB Securities Research - 6 Aug 2018