Maintain short positions as the immediate support is being pressured. The Comex Gold performed weakly in the latest trading and at the closing breached the previous immediate support of USD1,306.40. Intraday tone was negative as it generally moved lower, the high and low were recorded at USD1,323.20 and USD1,297.80, before closing at USD1,305.80, indicating a decline of USD16.90. The weak session and the breach of the said previous immediate support indicate that the retracement leg that started from the high of USD1,349.80 on 20 Feb is continuing to develop. We are expecting this to be at least a multi-week correction phase – to correct the commodity’s previous upward move that started from Aug 2018 to February this year. Maintain our negative trading call.

As the retracement bias is still strong at its infancy stage, we continue to recommend traders stay in short positions. These positions were initiated at USD1,322.70, the closing level of 1 Mar. For risk management purposes, a stop-loss can be placed above USD1,349.80.

Immediate support is revised to USD1,281.50, which was the low of 24 Jan 2018. This is followed by USD1,270.30, the high of 20 Dec 2018. Moving up, immediate resistance is set at USD1,349.80, the high of 20 Feb. This is followed by USD1,370.50, which was the high of 25 Jan 2018.

Source: RHB Securities Research - 4 Mar 2019