Maintain long positions. The COMEX Gold ceased its latest session in neutral territory. It closed USD1.30 lower to settle at USD1,201.60, with the day’s trading range between USD1,199.40 and USD1,210.70. The overall positive bias for the commodity to extend its corrective rebound remains in place. Our price movement observations over the past five weeks suggest the commodity is in consolidation mode below the resistance zone. The latter consists of both the 50-day SMA line and USD1,215 immediate resistance. Should this resistance wall be cracked, the COMEX Gold is likely to extend its rebound. On these observations, we keep our near-term positive trading bias.

As the corrective rebound is likely to extend once the resistance zone is overcome, 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 still peg the immediate resistance 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. The overhead resistance is at the USD1,215 mark, or 20 Jul’s low. This is followed by the USD1,239 level, which was 26 Jul’s high.

Source: RHB Securities Research - 5 Oct 2018