Multi-month correction is still developing; maintain short positions. The Comex Gold added USD3.80 to settle at USD1,286.30 – this was after it swung between a low and high of USD1,283.80 and USD1,290.30. Despite the gain, the precious metal is still trading within the possible multi-month corrective flag formation. Based on its recent price trajectory, likelihood is strong that it will retest the immediate support of USD1,267.90 to complete the said flag formation. Recall that this multi-month correction phase kicked in to correct the prior upward move phase which took place between the low of USD1,162.70 on 16 Aug 2018 and the high of USD1,349.80 on 20 Feb. Maintain negative trading bias.

As indications are strong that the commodity has not reached the low for its multi-month 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 expected 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 - 30 May 2019