Maintain long positions, as the precious metal may have entered a consolidation phase. The COMEX Gold ended the latest session slightly soft at USD1,415.40, representing a decline of USD3.30. The low and high were registered at USD1,405 and USD1,427.90. The price actions in the latest two sessions – after the USD1,432.90 immediate resistance was briefly tested in the prior session – suggests a consolidation phase is likely taking place. This comes after the commodity’s recent 3-week sharp upward move hit an overbought Daily RSI reading. We believe this consolidation phase may still have the room to extend, considering the still-high Daily RSI reading. We maintain our positive trading bias.

As there are insufficient indications to suggest that the consolidation phase will take the shape of a deep retracement, we retain our recommendation for traders to stay in long positions. We opened these positions at USD1,333.60, which was the closing level of 5 Jun. For risk-management purposes, a stop-loss can be placed at the breakeven mark.

The immediate support is set at the USD1,400 level, a round figure. This is followed by USD1,336.60, which was the low of 17 Jun. Towards the upside, the immediate resistance is now pegged at USD1,432.90, or the high of 28 Aug 2013 – this is followed by the USD1,500 threshold.

Source: RHB Securities Research - 27 Jun 2019