Maintain short positions. The COMEX Gold ceased the latest session on a positive note. At the closing the precious metal added USD18.90 – after hitting a low and high of USD1,480.50 and USD1,511.40. The commodity has been showing signs of developing a rebound in the latest two sessions. This can be seen as a minor pause after it experienced a decline over the recent weeks. Overall, we still believe the commodity’s retracement phase has not reached an end yet. Hence, we are sticking with our negative trading bias.

Until the bulls manage to signal firm control over the price trend, 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 still expected at 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). Moving up, the immediate resistance is set to emerge 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 - 3 Oct 2019