A sideways consolidation is still a likelier scenario; maintain long positions. The COMEX Gold performed positively. At the close, it settled USD18.90 higher at USD1,414.20 – this was after the commodity reached a low and high of USD1,393.20 and USD1,429.20. The positive session came after the previous session’s sharp drop. However, we are still holding to the view that the precious metal is in the process of developing a sideways consolidation phase, which has been in development over the past week or so. This consolidation is deemed healthy to correct its previous multi-week upward move, which reached an overbought Daily RSI reading recently. We maintain our positive trading bias.

Given that the said consolidation phase is still likely to take the shape of a sideways pattern instead of a sharp 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 USD1,336.60, which was the low of 17 Jun. This is followed by USD1,300, ie the next round figure. On the other hand, 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 - 3 Jul 2019