Maintain short positions as the multi-week correction phase is still incomplete. The COMEX Gold gave up USD9.60 to close at USD1,506.20 – trading zone was between USD1,496.30 and USD1,512.10. The commodity’s price pattern, developed over the past week or so, is suggesting a minor sideways consolidation is taking place. This is so after it experienced a relatively sharp decline between 5 and 10 Sep. Once this minor consolidation is complete, the immediate support of USD1,483 would likely be tested. On the observation that the multi-week correction phase is still incomplete, we maintain our negative trading bias.

As the downside risk is still high, 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 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 set at USD1,566.20, which was the high of 4 Sep. This is followed by the USD1,600 threshold.

Source: RHB Securities Research - 20 Sept 2019