Maintain long positions. The COMEX Gold formed a black candle in the latest trading session, closing slightly below the 100-day SMA line – this signals that the session was under the bears’ control. The precious metal drifted lower for the entire session with the high and low registered at USD1,230.70 and USD1,219.40, before closing USD10.50 weaker at USD1,220.80. Towards the downside, should the immediate support of USD1,215 be broken, this would likely confirm a price rejection for both the immediate resistance of USD1,239 and the said SMA line. Until this happens, we are keeping our positive trading bias.

As there is no price confirmation to indicate that a deeper retracement is developing, 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 expected to emerge at the USD1,215 mark, or 20 Jul’s low. The second support is at USD1,184, which was the low of 24 Aug. Moving up, 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 - 1 Nov 2018