Maintain short positions as the multi-month correction phase is still developing. The precious metal ended higher with a gain of USD6.10 to close at USD1,292.40. The session’s trading range was between USD1,279.20 and USD1,293.90. The commodity’s near two-week’s upward move can be seen as just a minor rebound within the larger incomplete multi-month retracement phase – which is taking the shape of a possible flag. Based on this bias, the probability is still high that the commodity will have to retest the immediate support of USD1,267.90. Hence, we are keeping our negative trading bias.

As the bias is for the commodity to retrace further, 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 - 31 May 2019