Maintain short positions. The Comex Gold formed a white candle to settle USD11.50 higher at USD1,291. This was after it ranged between USD1,277.50 and USD1,292.50. As a trend, the commodity’s correction mode that stretched from the high of USD1,349.80 on 20 Feb is still in place. At this juncture, we are seeing the said correction phase as possibly taking the shape of a “Bull Flag” pattern. This implies the likelihood is high that the immediate support of USD1,267.90 would be tested to complete the said pattern. Maintain our negative trading bias.

As we continue to see another lower low is needed to complete the said possible “Bull Flag” price pattern, 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.

Immediate support is eyed at USD1,267.90, or the low of 23 Apr. This is followed by USD1,236.50, ie the low of 14 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, or the high of 20 Feb.

Source: RHB Securities Research - 24 May 2019