Initiate long positions as the multi-month consolidation may have completed. The COMEX Gold formed a white candle in the latest session and in the process tested the immediate resistance of USD1,349.80. Session’s low and high were registered at USD1.334.30 and USD1,352.70, before closing at USD1,346.10, indicating a gain of USD3.40. We believe the commodity’s multi-month consolidation in the form of a flag formation has completed. This suggests chances are high that the precious metal is likely to resume its upward move that started from the low of USD1,162.70 on 16 Aug 2018. Hence, we are now having a positive trading bias on the precious metal.

Our previous short positions initiated at USD1,281.40, ie the closing level of 17 May, were closed out at USD1,330.80. On the anticipation that that the commodity is resuming its upward move, we opened long positions at USD1,333.60, the closing level of 5 Jun. For risk management purposes, a stop-loss can be placed below USD1,267.90.

Immediate support is revised to USD1,300, a round figure. This is followed by USD1,267.90, or the low of 23 Apr. Meanwhile, the immediate resistance is now pegged at the USD1,349.80 threshold, ie the high of 20 Feb. This is followed by USD1,380.90, which was the high of 6 Jul 2016.

Source: RHB Securities Research - 10 Jun 2019