Maintain long positions. The COMEX Gold eased during the latest session by USD3.60 to settle at USD1,227.40. The session’s low and high were recorded at USD1,223.70 and USD1,232.90. On a broader view, the negative session has not altered the commodity’s constructive technical picture. Instead, it can be seen as a possible sign of consolidation above the USD1,215 immediate support, after the recent rally. The 50-day SMA line, which is starting to show early signs of turning up, is also indicating a positive bias. Hence, we are keeping our positive trading bias.

Provided the said immediate support is not broken, the risk of the rebound reaching an end is remote. As such, 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 placed below USD1,215.

We continue to peg the immediate support target at the USD1,215 mark, or 20 Jul’s low. This is followed by USD1,184, which was the low of 24 Aug. Conversely, the 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 - 18 Oct 2018