Maintain long positions while waiting for a firm breakout from consolidation phase. The COMEX Gold ended the latest session softer by USD5.20 at USD1,428.20. Trading was in the range of USD1,421.10 and USD1,437. The precious metal has been struggling to stage a firm breakout from its near 3-week consolidation phase in recent sessions. A firm breakout is crucial in signalling an extension of its upward move. Towards the downside, if the immediate support of USD1,390 is breached, the risk for a deep retracement would be high. For now, we keep to our positive trading bias.

As the technical picture is still healthy, we retain our recommendation for traders to stay in long positions. We opened these positions at USD1,333.60, which was the closing level for 5 Jun. For risk management purposes, a stop-loss can now be placed below the USD1,390 mark.

Immediate support is expected at USD1,390, or near the low of 1 Jul. This is followed by USD1,336.60, which was the low of 17 Jun. On the other hand, the immediate resistance is set at the USD1,500 threshold. This is followed by the USD1,550 level.

Source: RHB Securities Research - 24 Jul 2019