Maintain long positions while moving up the trailing-stop. The COMEX Gold failed to hold on to its intraday gains, which at one point saw it come in near to test the resistance of USD1,788.80 with a high of USD1,787.50 – before sliding down to close at USD1,746.70. Consequently, a “Bearish Engulfing” formation appeared, which indicates a possible price rejection. However, to confirm this, we are of the view that the latest low has to be breached at the closing in the coming sessions. Until this happens, the commodity’s uptrend would still be considered as intact. Maintain our positive trading bias.

Pending the confirmation of the latest “Bearish Engulfing” formation, we advise traders to stay in long positions. We initiated these at USD1,752.10, or the closing level of 14 May. For risk-management purposes, a stop-loss can now be placed below the USD1,741.90 level.

We revise the immediate support to USD1,741.90, the latest low. This is followed by USD1,725, or the price point of 13 May. Moving up, the immediate resistance is set at USD1,788.80 – the high of 14 Apr – followed by the USD1,800 round figure.

Source: RHB Securities Research - 19 May 2020