Maintain long positions. The COMEX Gold ended the latest session weaker by USD3.10 to settle at USD1,204.4. The session’s low and high were recorded at USD1,198.6 and USD1,208.8. In the broader picture, the sideways price consolidation pattern that developed over the past 3.5 weeks, below both the immediate resistance of USD1,215 and the 50-day SMA line, is still valid. For now, as long as the immediate support of USD1,184 is not breached to the downside, the likelihood for the commodity to extend its rebound from the low of USD1,162 on 16 Aug would still be strong and may resume once the ongoing consolidation phase ends. Hence, we maintain our near-term positive trading bias.

As there is no indication to suggest the commodity’s rebound phase has reached an end, we continue to advise traders to keep long positions on the COMEX Gold. Recall that we initiated these positions after the commodity breached above the USD1,207.60 mark on 12 Sep. For risk management purposes, a stop-loss can be set at below the USD1,184 threshold.

Immediate support is eyed at USD1,184, which was the low of 24 Aug. Breaking this may see market retest USD1,162 critical support registered on 16 Aug – this was also the YTD low. On the other hand, the immediate resistance is at USD1,215, or the low of 20 Jul. This is followed by the USD1,239 level, ie 26 Jul’s high.

Source: RHB Securities Research - 25 Sept 2018