Maintain long positions, as the immediate support still holds on. The COMEX Gold formed a black candle in the latest session – at one point, it came to a near distance of testing the USD1,184 immediate support. The precious metal generally trended lower throughout the session – from a high of USD1,202.60 to a low of USD1,185.60 – before ending at USD1,187.4, indicating a decline of USD11.70. The relatively strong negative session is now signalling a possible price rejection from the 50-day SMA line. It may also nullify our assessment that its price actions over the past four weeks are part of a sideways consolidation phase before the commodity resumes its expected upward move. However, a downside breach of the said immediate support is needed to confirm that the near-term upward move has indeed reached an end. Until this happens, we are keeping our near-term positive trading bias.

Provided the immediate support is not broken, we continue to advise traders to keep long positions. Recall that we initiated these positions after the COMEX Gold breached above the USD1,207.60 mark on 12 Sep. For riskmanagement purposes, a stop-loss can be set at below the USD1,184 threshold.

Towards the downside, immediate support is set at USD1,184, which was the low of 24 Aug. This is followed by the USD1,162 critical support registered on 16 Aug – this was also the YTD low. Moving up, 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 - 28 Sept 2018