Maintain long positions. The COMEX Gold added USD2.10 to close at USD1,293.30. This was after it reached a low and high of USD1,289.80 and USD1,296.The closing level has placed the commodity indecisively above the downtrend line (as drawn in the chart). For now, the rebound that started from the immediate support of USD1,267.90 is still considered as a minor rebound. For a stronger rebound to take place, the said downtrend line needs to be taken out firmly in the coming sessions – this is in order to signal that the multi-week correction phase that started from the high of USD1,349.80 on 20 Feb has reached an end, thus opening up the possibility for its upward move that started from the low of USD1,162.70 on 16 Aug 2018 to resume. Maintain positive trading bias.

As there is still a good possibility for the bulls to crack above the said downtrend line decisively, we continue to recommend traders stay in long positions. These were initiated at USD1,290.20, which was the closing level of 1 May. A stop-loss can be placed below the USD1,267.90 level.

Immediate support is set at USD1,267.90, or the low of 23 Apr. The second support is pegged at USD1,236.50, ie the low of 14 Dec 2018. Moving up, the immediate resistance is expected at USD1,330.80, which was the high of 25 Mar. This is followed by USD1,349.80, or the high of 20 Feb.

Source: RHB Securities Research - 13 May 2019