Consolidation is extending; maintain long positions. The yellow metal added USD4.20 to cease the latest session at USD1,509.70. This was after it hit a low and high of USD1,497 and USD1,512.70. We continue to observe, based on the price actions over the recent sessions, that the COMEX Gold is still in the midst of developing a consolidation phase around the USD1,500 mark. By extension, this means we are not seeing clear signs of a price reversal that could suggest the risk for a deeper price retracement to develop. Stay with our positive trading bias.

As the commodity is merely experiencing a relatively narrow consolidation – after its prior multi-week upward move reached an overbought reading recently, 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 are still expecting immediate support at USD1,406, or near the low of 1 Aug. This is followed by USD1,336.60, which was the low of 17 Jun. Moving up, the immediate resistance is set at the USD1,550 level. This is followed by the USD1,600 threshold.

Source: RHB Securities Research - 21 Aug 2019