Maintain long positions. The COMEX Gold formed a black candle in the latest session. It ended USD4.50 lower at UD1,191.70 – the daily trading range was between USD1,188.10 and USD1,196.50. On the broader picture, the corrective rebound that kicked in from the low of USD1,162 on 16 Aug is still valid. This bias would still be in force, provided the immediate support of USD1,184 is not violated. This ongoing corrective rebound was triggered after the commodity experienced a steep retracement between January and August – which reached an oversold mark. Based on this, we are keeping our near-term positive trading bias.

As the bulls continued to hold into the immediate support, we continue to advise traders to keep their long positions. 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 below the USD1,184 threshold.

Immediate support is still pegged at USD1,184, which was the low of 24 Aug. The second support is at the 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 - 2 Oct 2018