Stay short, as the downtrend has not reached its limit yet. At the end of last Friday’s session, the COMEX Gold ended at USD1,214.20 and posted a USD0.90 loss. As a result, the commodity inched down below the previous USD1,215 support. We believe the opportunities are still leaning more towards the sellers. We also highlight that the 50-day SMA line has slipped by USD1.81 to USD1,255.79. From our technical perspective, this implies a weak outlook, thereby enhancing our bearish view.

Looking forward, we believe the downtrend may still extend in the coming sessions. As such, traders are advised to maintain short positions, with a trailing-stop pegged above the USD1,240 threshold. This is in order to secure part of the trading profits. For the record, our short call was initially triggered on 16 May after the COMEX Gold’s price dipped below the USD1,309 level.

Our immediate support is now at USD1,207, which was obtained from the low of 10 Jul 2017. This is followed by the next support at the USD1,198 mark, or the low of 10 Mar 2017. Towards the upside, we set the immediate resistance at USD1,215, ie the low of 20 Jul’s Bullish Engulfing” pattern. For the next resistance, look to USD1,240 – this is near 26 Jul’s high.

Source: RHB Securities Research - 13 Aug 2018