Maintain long positions, as the multi-week correction has likely reached an end. The COMEX Gold formed a white candle which – at the closing – firmly breached above the downtrend line (as drawn in the chart). The session’s low and high were posted at USD1,288.30 and USD1,308, before ending USD14.40 higher at USD1,307.70. The relatively firm breakout has, in our view, confirmed that the commodity’s multi-week correction phase has reached an end – implying that chances are high it may resume its upward move, which started from the low of USD1,162.70 on 16 Aug 2018. Consequently, we maintain our positive trading bias.

Given that the bulls are back in a strong footing to drive the price direction, 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 now be placed at the breakeven level.

Immediate support is eyed at USD1,267.90, or the low of 23 Apr. The following support may emerge at USD1,236.50, ie the low of 14 Dec 2018. Conversely, 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 - 14 May 2019