Retracement leg is still developing; maintain short positions. The precious metal continued to struggle in the latest session – it shed USD11.80 to settle at USD1,294 – as it generally moved lower for the entire session, the high and low were posted at USD1,304.60 and USD1,290.30. The negative performance is indicating the commodity’s retracement leg is extending and not showing signs of ending. We expect this to be at least a multiweek correction to correct the previous upward move that started from the low of USD1,162.70 on 16 Aug 2018 till the recent high of USD1,349.80 on 20 Feb. Based on its recent price retracement trajectory, the bias is getting stronger for it to retest the 200-day SMA line. Keep to our negative trading call.

With the bias that the commodity is still developing its correction phase, 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 maintained at 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 - 5 Mar 2019