Maintain short positions in line with the ongoing downtrend. Last night, the COMEX Gold inched up USD2.20 to USD1,201.30, and left a white candle. This shows that the session was led by the buyers. However, we make no change to our bearish view, given that no strong upside development has been sighted yet. Moreover, we highlight that the 14-day RSI indicator is currently situated below the 50-pt neutral mark at 44.10 pts. Technically speaking, this implies market sentiment is weak, thereby enhancing our downside view. Overall, the current downtrend remains in play.

In line with our bearish view, we recommend traders maintain their short positions, with a trailing-stop pegged above the USD1,215 threshold. This is in order to secure part of the trading profits. Recall that our short call was triggered below the USD1,309 mark on 16 May.

The immediate support stays at USD1,184, which is located at 24 Aug’s low. If this level is taken out, our next support is pegged at the USD1,162 threshold, or the low of 16 Aug. Conversely, we set the immediate resistance at USD1,215, which was the low of 20 Jul’s “Bullish Engulfing” pattern. This is followed by the USD1,239 resistance, ie the high of 26 Jul.

Source: RHB Securities Research - 6 Sept 2018