Maintain long positions as recent weakness still considered corrective in nature. The COMEX Gold formed a black candle to close USD24.30 lower at USD1,395.30, thus breaching the previous immediate support of USD1,400. The session’s low and high were posted at USD1,390.90 and USD1,411. At this juncture, we are still seeing good possibility that the commodity is undergoing a consolidation phase. This was triggered after it experienced a relatively sharp multi-week upward move, which pushed its Daily RSI reading into the overbought reading area recently. Until we see the risk of a deeper retracement appearing, we are keeping to our positive trading bias.

In the absence of strong price reversal signals, 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.

Towards the downside, immediate support is revised to USD1,336.60, which was the low of 17 Jun. This is followed by USD1,300, the next round figure. Moving up, the immediate resistance is set at USD1,432.90, or the high of 28 Aug 2013 – this is followed by the USD1,500 threshold.

Source: RHB Securities Research - 2 Jul 2019