Maintain long positions, as the overall positive bias remains in place. The COMEX Gold formed a black candle in its latest session, ending USD4.10 lower at USD1,202.90. The session’s low and high were at USD1,200.40 and USD1,212.30. While the commodity slid from the resistance zone – comprising both the 50-day SMA line (USD1,205.57) and immediate resistance (USD1,215) – again, we continue to observe that the overall trend remains positive. In the near future, should the bulls overcome said resistance zone, chances are high that the rebound, which started from the low of USD1,162 on 16 Aug, will be extended. Based on this, we keep our nearterm positive trading bias.

Provided the USD1,184 immediate support – which was re-tested on 28 Sep – is not invalidated, we continue to advise traders to keep their long positions. Recall that we initiated these positions after the COMEX Gold 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 may emerge at USD1,184, which was the low of 24 Aug. Breaking this may see market re-test the USD1,162 critical support registered on 16 Aug – this was also the YTD low. Conversely, the immediate resistance is set at the USD1,215 mark, or 20 Jul’s low. This is followed by the USD1,239 level, ie 26 Jul’s high.

Source: RHB Securities Research - 4 Oct 2018