Maintain short positions as the black gold is still in correction mode. The Comex Gold gained marginally by USD0.70 to settle at USD1,279.50. The trading took place in the range of USD1,277.60 and USD1,282.40. Broadly, the commodity’s correction phase that started from the high of USD1,349.80 on 20 Feb is still showing signs of extending. This correction phase is to correct the previous upward move that happened between 16 Aug 2018’s low of USD1,162.70 and the said 20 Feb high. For now, the correction phase would remain in place provided the commodity is still capped by the downtrend line (as redrawn in the chart). Maintain our negative trading bias.

As the bias for the immediate support of USD1,267.90 to be tested has increased, we recommend traders stay in short positions, initiated at USD1,281.40, the closing level of 17 May. A stop-loss can be placed at USD1,330.80.

Towards the downside, immediate support is pegged at USD1,267.90, or the low of 23 Apr. This is followed by USD1,236.50, ie the low of 14 Dec 2018. On the other hand, the immediate resistance is set at USD1,330.80, which was the high of 25 Mar. This is followed by USD1,349.80, or the high of 20 Feb

Source: RHB Securities Research - 23 May 2019