Maintain short positions on the expectation of further retracement. The precious metal failed to maintain its intraday gains and at the closing fell USD4.50 to end at USD1,316.90. The high and low were posted at USD1,325.20 and USD1,313.70. On the broader picture, we continued to see the commodity’s correction phase (which started from the high of USD1,349.80) as incomplete, and is likely to extend. This correction phase is taking place to correct the commodity’s previous multi-month’s upward move that took place between the low of USD1,162.70 on 16 Aug 2018 and high of 20 Feb’s USD1,349.80. We maintain our negative trading bias.

On the bias that the correction is likely to extend further, we continue to recommend that traders stay in short positions. These positions were initiated at the USD1,322.70 level, which was the closing mark of 1 Mar. For riskmanagement purposes, a stop-loss can be placed above the USD1,349.80 threshold.

The immediate support is still pegged at USD1,281.50, which was the low of 24 Jan 2018. The following support is at USD1,270.30, or the high of 20 Dec 2018. On the other hand, 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 - 28 Mar 2019