Maintain short positions as the correction is still developing. The precious metal ended the latest trading marginally weaker by USD0.40 to close at USD1,276.80. The trading range was between USD1,375.20 and USD1,282.10. Overall, the commodity’s short-term negative price trend that started from the high of USD1,349.80 on 20 Feb is still not showing signs of ending. Towards the downside, increasingly, the 200-day SMA line is set to be tested. Based on these observations, we are keeping our negative trading bias.

As the bears are still showing clear control over the price trend, we continue to recommend traders stay in short positions. We initiated these positions at USD1,291.30, the closing level of 12 Apr. For risk management purposes, a stop-loss can be placed above USD1,330.80.

Towards the downside, immediate support is set at USD1,270.30, which was the high of 20 Dec 2018. The second support is pegged at USD1,236.50, the low of 14 Dec 2018. Moving up, the immediate resistance is expected 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 - 18 Apr 2019