Maintain long positions as the bulls are merely taking a pause. The COMEX Gold closed the latest session on the weak side. It settled USD16.80 lower at USD1,329.30, the low and high were at USD1,329 and USD1,341.70. The weak session came after the commodity experienced a relatively sharp upward move over the past two weeks, this can be seen as a sign of a consolidation phase kicking in. Broadly, we still believe the commodity’s previous multi-month correction phase, in the form of a flag pattern has completed. As such, it is likely in the process of extending its upward move that started from the low of USD1,162.70 on 16 Aug 2018. Maintain our positive trading bias.

As the latest weakness is seen as a sign of a minor consolidation, we continue to recommend traders stay in long positions. We opened these 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 expected at USD1,300, a round figure. This is followed by USD1,267.90, or the low of 23 Apr. On the other hand, the immediate resistance is set 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 - 11 Jun 2019