Maintain long positions – as long as the immediate support is not invalidated. The COMEX Gold formed a black candle in the latest trading session, effectively being pushed back below the resistance zone. The latter comprises the USD1,215 immediate resistance and 50-day SMA line. The intraday tone was negative – it generally moved lower to a low of USD1,186 from a high of USD1,208 before closing USD17 weaker at USD1,188.60. While the price rejection from said resistance zone – as happened multiple times over the past five weeks – is considered negative, the overall corrective rebound that started from 16 Aug’s USD1,162 low remains in place. This is, of course, provided the USD1,184 immediate support is not breached. Based on this, we retain our near-term positive trading bias.

As there is no price confirmation to suggest the corrective rebound has reached an end, 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.

We peg 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. Conversely, the immediate resistance is set 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 - 9 Oct 2018