Maintain short positions while waiting for the confirmation of a change in bias. The COMEX Gold formed a white candle, which – at the closing – crossed above the upper-bound line of the possible multi-month flag formation. The session’s low and high were posted at USD1,292.50 and USD1,311.90 before settling at USD1,311.10, which indicated a gain of USD18.70. While the commodity has breached above said upper-bound line, further positive price actions are still needed to signal its multi-month correction has indeed reached an end. At this juncture, we are looking at the firm upside breach of the USD1,330.80 immediate resistance for such confirmation. Until this happens, we are sticking with our negative trading bias.

Pending the confirmation that the bulls are back in the driving seat, we recommend traders to stay in short positions. This was initiated at USD1,281.40, ie the closing level of 17 May. A stop-loss can be placed at USD1,330.80.

The immediate support is pegged at USD1,267.90, or the low of 23 Apr. This is followed by USD1,236.50, which was the low of 14 Dec 2018. Moving up, the immediate resistance is set at USD1,330.80, or the high of 25 Mar. This is followed by the USD1,349.80 threshold, ie the high of 20 Feb.

Source: RHB Securities Research - 3 Jun 2019