Maintain short positions while moving the trailing-stop to breakeven level. The COMEX Gold formed a black candle in the latest session, which at the closing pierced through the previous immediate support of USD1,483. Trading range was wide, between USD1,470.50 and USD1.507.20, before closing at USD1,472.90, indicating a decline of USD33.50. The negative session means the commodity’s correction phase, which started from the high of USD1,566.20 on 4 Sep, is still progressing. While the retracement has reached our initial minimum target of USD1,483, in the absence of price reversal signals, we are keeping our negative trading bias.

As the correction phase is still developing, 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 now be placed at the breakeven level.

Immediate support is revised to the USD1,406 mark, which was near the low of 1 Aug. This is followed by USD1,361.30, the low of 20 Jun (also located near the 200-day SMA line). Meanwhile, the immediate resistance now pegged at USD1,543.30, the high of 24 Sep. This is followed by USD1,566.20, which was the high of 4 Sep.

Source: RHB Securities Research - 1 Oct 2019