Maintain long positions as the sideways consolidation phase is still developing. The COMEX Gold formed a black candle in the latest session. At the closing it settled at USD1,406.30, indicating a decline of USD20.80. The weak session can be seen as part of the commodity’s sideways consolidation phase that has been in development over the recent sessions. This means the overall positive price structure remains in place. This consolidation phase is necessary to correct the commodity’s prior multi-week’s relatively sharp upward move. Maintain our positive trading bias.

In the absence of price reversal signals that could mark the end of the commodity’s upward move, 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 still expected at USD1,336.60, which was the low of 17 Jun. This is followed by USD1,300, the next round figure. Towards the upside, 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 - 8 Jul 2019