Maintain short positions as the correction phase has not ended. The COMEX Gold formed a black candle to give up USD10.50 to end at USD1,470.50. Trading ranged between USD1,469.40 and USD1,482.70. The negative session could potentially mark the end of the precious metal’s minor rebound, which took place over the past sessions. This implies chances are high that its correction phase, which started from the high of USD1,566.20 on 4 Sep could be resuming. This correction phase would be deemed as still in place, as long as the commodity is still capped by the downtrend line (as drawn on the chart). Maintain our negative trading bias.

Given that the multi-week correction phase could still have room to go further, we advise traders to stay in short positions. We initiated these at USD1,464.10, the closing level of 11 Nov. For risk-management purposes, a stop loss can be placed above USD1,525.00.

Immediate support is set the USD1,406.00 mark, ie near the low of 1 Aug. This is followed by USD1,390.90, the low of 1 Jul. Moving up, the immediate resistance is set at USD1,525.00, the high of 3 Oct. This is followed by USD1,566.20, which was the high of 4 Sep.

Source: RHB Securities Research - 22 Nov 2019