Correction phase is still at early stage; maintain short positions. The precious metal continued to extend its slide in the latest session. It settled USD11.90 lower at USD1,499.20 – marginally below the USD1,500 round figure. The low and high were posted at USD1,492.10 and USD1,509.10. The negative session reinforces our view that the commodity is in the process of developing a correction phase. This correction phase set in after the commodity experienced a relatively sharp multi-month upward move. Towards the downside, at the minimum, we are expecting the immediate support of USD1,483 to be tested. Maintain our negative trading bias.

As the correction phase is still likely to extend, we recommend traders stay in short positions. These were initiated at USD1,511.10, which was the closing level of 9 Sep. For risk-management purposes, a stop loss can be placed above USD1,566.20.

Immediate support is still set at USD1,483, or the low of 13 Aug. This is followed by the USD1,406 mark, which was near the low of 1 Aug. Moving up, the immediate resistance is now envisaged at USD1,566.20, which was the high of 4 Sep. This is followed by the USD1,600 threshold.

Source: RHB Securities Research - 11 Sept 2019