The upward move could extend once the consolidation phase is over; maintain long positions. The COMEX Gold formed a white candle in the latest trade. The intraday tone was positive, as it generally trended higher from the intraday low of USD1,407.80 in the earlier session to settle at USD1,429.70 – this indicated a gain of USD12.10. Still, the precious metal was trading within the sideways consolidation phase that has been in development over the past two weeks or so. This phase is deemed healthy to correct the previous multi-week upward move, which reached an overbought Daily RSI reading in early July. We maintain our positive trading bias.

With the expectation that the upward move should resume once the consolidation phase is over, 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 set at USD1,336.60, which was the low of 17 Jun. This is followed by USD1,300, or the next round figure. Moving up, the overhead resistance is expected at USD1,432.90, ie the high of 28 Aug 2013. This is followed by the USD1,500 threshold.

Source: RHB Securities Research - 18 Jul 2019