Maintain positions as the correction is still incomplete. The COMEX Gold advanced USD1.20 to settle at USD1,295.40, the daily trading range was between USD1,289.50 and USD1,297.10. Still, we believe the precious metal’s multi-week correction is still incomplete – this is to correct the previous multi-month upward move that took place between the low of USD1,162.70 on 16 Aug 2018 and the high of USD1,349.80 on 20 Feb. Towards the downside, chances are high that the commodity would test the immediate support level of USD1,281.50. Until signs that the correction phase has reached an end emerge, we keep our negative trading bias.

As the probability for the commodity to test the said immediate support is high, 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 risk-management purposes, a stop-loss can be placed above the USD1,349.80 threshold.

Towards the downside, the immediate support is expected 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. 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 - 3 Apr 2019