Maintain long positions as the technical landscape for further rebound is still in place. The COMEX Gold ended the latest session marginally higher by USD0.70 to settle at USD1,231 – after it swung between a low and high of USD1,226.30 and USD1,235.90. Overall, the bias for the precious metal to extend its rebound that resumed after it broke out from its consolidation zone on 11 Oct – which consists of both the 50-day SMA line and the previous immediate resistance of USD1,215 – remains in place. The rebound so far has not been stretched, as the daily RSI reading of 62.41 is below the overbought threshold. Based on these, we are keeping our positive trading bias.

With no price exhaustion spotted, 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 riskmanagement purposes, a stop-loss can now be placed at below USD1,215.

The immediate support target stays at the USD1,215 mark, or 20 Jul’s low. The second support is at USD1,184, which was the low of 24 Aug. On the other hand, immediate resistance is eyed at the USD1,239 level, which was 26 Jul’s high. This is followed by USD1,272.30, the high of 9 Jul.

Source: RHB Securities Research - 17 Oct 2018