Maintain short positions as another lower low is possible. The Comex Gold closed the latest session on a negative note. It softened USD6.70 to settle at USD1,282.50, the trading range was between USD1,280.80 and USD1,292.60. On the expectation that the multi-month correction phase that started from the high of USD1,349.80 on 20 Feb is taking the shape of a flag, we are seeing good possibility that the commodity could, at the minimum, retest the immediate support of USD1,267.90. To recap, this correction phase is developing to correct the commodity’s previous upward move that took place between the low of USD1,162.70 on 16 Aug 2018 and the said 20 Feb high. Maintain our negative trading bias.

As we continue to see a strong likelihood that the commodity would extend its correction phase, 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 - 29 May 2019