Maintain long positions as the commodity is merely showing a healthy consolidation. The COMEX Gold softened USD7.60 to settle at USD1,517.50 in the latest session – as it failed to sustain its earlier session’s gains. The low and high were posted at USD1,508 and USD1,532.10. Price actions over the recent sessions are indicating the precious metal is likely undergoing a consolidation phase. This is deemed healthy to correct its previous upward phase – between early August and mid August – which reached an overbought RSI reading. Based on these technical observations, we are keeping our positive trading tone.

In the absence of price reversal signals that could mark an end to its 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 for 5 Jun. For risk-management purposes, a stop-loss can now be placed below the USD1,406 mark.

We maintain the immediate support target at USD1,406, or near the low of 1 Aug. This is followed by USD1,336.60, which was the low of 17 Jun. Meanwhile, the immediate resistance is pegged at the USD1,550 level. This is followed by the USD1,600 threshold.

Source: RHB Securities Research - 19 Aug 2019