Retracement phase may not have reached an end yet; initiate short positions. The COMEX Gold shed USD3.90 to settle at USD1,291.30. The low and high were posted at USD1,285.30 and USD1,295.20. The weak session has in our view invalidated our previous bias that its multi-week consolidation phase (which started from the high of USD1,349.80 on 20 Feb) has completed. This implies that the risk is higher for the commodity to retrace further vs the prospect for it to resume its upward move, which started from the low of USD1,162.70 on 16 Aug 2018. We switch our trading bias to negative.

Our previous long positions initiated at USD1,308.30 were closed out in the latest trading at USD1,292.40. On the bias that the bears are in control, we initiate short positions at the latest closing. For risk management purposes, a stop-loss can be placed above USD1,330.80.

Immediate support is revised to USD1,281.50, or the low of 24 Jan 2018. This is followed by USD1,270.30, which was the high of 20 Dec 2018. Moving up, the immediate resistance is set at USD1,330.80, which was the high of 25 Mar. This is followed by USD1,349.80, ie the high of 20 Feb.

Source: RHB Securities Research - 16 Apr 2019