Maintain long positions. The COMEX Gold formed a long white candle in the latest session – at the closing it marginally crossed the 50-day SMA line (current reading: USD1,206.11). The precious metal generally trended higher for the session, from a low of USD1,192.20 to a high of USD1,212.30, before ending USD15.30 higher at USD1,207. The positive session again brings the commodity back to the resistance zone, which is made up from the SMA line and the USD1,215 immediate resistance mark. A firm break from this zone would likely signal the resumption of the corrective rebound that started from the low of USD1,162 on 16 Aug. On these observations, we are keeping our near-term positive trading bias.

With the bulls continuing to show strength after the immediate support of USD1,184 was tested three sessions ago, 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.

We continue to eye the immediate support 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. Overhead resistance is still pegged 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 - 3 Oct 2018