Maintain short positions on expectation that the correction still has legs. The COMEX Gold formed a white candle in the latest session to close USD13.20 higher at USD1,306. The session’s intraday tone was encouraging as it generally moved higher, the low and high were at USD1,292.20 and USD1,307.70. Nevertheless, the positive session has not negated the bias for the commodity to extend its correction phase, which started from the high of USD1,349.80 on 20 Feb. We continue to expect this correction phase to have some room to go, to consolidate the previous multi-month upward move that took place between mid-Aug 2018 and mid-Feb 2019. Maintain our negative trading bias.

Until there are further positive price actions to suggest the correction phase has reached an end, we continue to recommend traders stay in short positions. These positions were initiated at USD1,322.70, which was the closing level of 1 Mar. For risk-management purposes, a stop-loss can be placed above the USD1,349.80 level.

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

Source: RHB Securities Research - 11 Mar 2019