Maintain short positions as the correction phase is likely to extend. The COMEX Gold registered a minor gain of USD4 to settle at USD1,503.20. This was after it swung between a low and high of USD1,492.90 and USD1,506.20. While the commodity settled slightly above the USD1,500 round figure level, this did not produce sufficient evidence to suggest a price reversal. Overall, we still believe the commodity’s correction phase still has room to extend further. At the minimum, we see a good likelihood for the immediate support of USD1,483 to be tested. Maintain our negative trading bias.

As the correction is still likely to extend further to correct its previous multi-month upward move, we recommend traders stay in short positions. These were initiated at USD1,511.10, which was the closing level of 9 Sep. For riskmanagement purposes, a stop loss can be placed above USD1,566.20.

Immediate support is expected 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. On the other hand, 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 - 12 Sept 2019