Maintain short positions, as the correction phase is expected to extend. The COMEX Gold gained USD6.90 to close at USD1,304.50 during the latest trading session. The latter’s low and high were recorded at USD1,298.60 and USD1,308.80. While the latest three sessions’ price actions indicate some form of rebound is developing, at this juncture, said rebound has not produced any clear price signals that indicate the commodity’s retracement leg – which started from 20 Feb’s high of USD1,349.80 – has reached an end. This expected correction phase set in to correct the previous multi-month upward moves. We keep our negative trading bias.

As the bias is still strong for the COMEX Gold to extend its correction phase, we continue to recommend that 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 maintained at USD1,281.50, which was the low of 24 Jan 2018. The second support is eyed at USD1,270.30, or the high of 20 Dec 2018. Conversely, the immediate resistance is set at USD1,349.80, ie the high of 20 Feb. Breaking this may see the market test the USD1,370.50 threshold, which was the high of 25 Jan 2018.

Source: RHB Securities Research - 13 Mar 2019