Maintain long positions as the multi-week sideways consolidation phase is developing. The yellow metal advanced USD5.50 to settle at USD1,418.50 in the latest trade. Trading took place in the range of USD1,411.50 and USD1,412.30. Even with the latest gain, the commodity is still trading within a relatively narrow sideways consolidation zone that has been in development over the past two weeks or so. At this juncture, we deem this ongoing consolidation phase as a healthy one, and we are not seeing signs of price exhaustion that may suggest the risk for a deeper retracement to develop. Maintain our positive trading bias.

As the bulls are merely taking a pause after the previous multi-week’s relatively sharp 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.

Immediate support is expected at USD1,336.60, which was the low of 17 Jun. This is followed by USD1,300, or the next round figure. On the other hand, the immediate resistance is set at USD1,432.90, ie the high of 28 Aug 2013. The following resistance is pegged at the USD1,500 threshold.

Source: RHB Securities Research - 15 Jul 2019