Maintain long positions, as the COMEX Gold is consolidating around the resistance area. The commodity ended its latest session on a positive note. At the close, it ceased trading at USD1,205.60, implying a USD4 gain. This was after ranging between USD1,200.90 and USD1,209.80 during the session. Still, the precious metal remains capped by the resistance zone, formed by the USD1,215 immediate resistance and the 50-day SMA line (current reading: USD1,204.40). On the broader view, the COMEX Gold has been hovering around these thresholds over the past five weeks. Should these levels be breached to the upside, chances are high that the upward move from 16 Aug’s USD1,162 low can be extended. Based on this, we keep our near-term positive trading bias.

As the overall technical picture continues to show the good possibility of a rebound extension, we continue to advise traders to keep their long positions. Recall that we initiated these positions after the precious metal 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 resistance 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. Towards the upside, immediate resistance is expected 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 - 8 Oct 2018