Maintain long positions as there are no clear price reversal signals. The COMEX Gold ended the latest session in the positive territory and at one point, came near to test both the immediate resistance of USD1,239 and the 100-day SMA line. It closed USD3.70 higher to settle at USD1,231.30. The low and high were at USD1,227.50 and USD1,238.50. The commodity has been swinging around the said SMA line and immediate resistance in the recent trades, without any clear strong negative bias – indicating that chances are high it is merely consolidating after the recent upward move. Nevertheless, should there be a price rejection from these levels, the commodity may develop a deeper retracement. Until this happens, we are keeping our positive trading bias.

In the absence of negative price actions that could negate its bias to extend a rebound, we continue to advise traders to keep their long positions. Recall that we initiated these positions after the COMEX Gold breached above the USD1,207.60 mark on 12 Sep. For risk management purposes, a stop-loss can be placed below USD1,219.30, which was the low of 12 Oct.

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

Source: RHB Securities Research - 31 Oct 2018