Multi-week correction phase stays; maintain short positions. The COMEX Gold formed a black candle which erased the gains registered over the previous three sessions – indicating a bearish bias and pointing towards resumption of its multi-week correction phase. Trading range was wide, between USD1,507.40 and USD1,542.80, before closing USD27.90 lower at USD1,512.30. This ongoing correction phase is meant to rectify the commodity’s upward move take took place between early May till early September. Towards the downside, we are still expecting the immediate support of USD1,483 to be tested. Maintain our negative trading bias. As the latest weak session signals the bulls have failed to mark an end to the correction phase, 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. We are keeping the immediate support target 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 - 26 Sept 2019