The correction phase is not showing signs of reaching an end – maintain short positions. The COMEX Gold failed to hold on to its intraday gains, ceasing the latest session flat at USD1,470.50. Trading took place between USD1,468.10 and USD1,480.30. Broadly, the commodity’s multi-month correction phase is still not showing signs of a completion. The recent sessions’ price actions merely suggest a minor rebound is taking place instead of a total price reversal. For now, this negative bias should stay, provided the COMEX Gold is still capped by the downtrend line, as drawn on the chart.

In the absence of a clear price reversal signal to mark the end of said correction phase, we advise traders to stay in short positions. We initiated these at USD1,464.10, or the closing level of 11 Nov. For risk-management purposes, a stop loss can be placed above the USD1,525.00 threshold.

The immediate support is expected to emerge at the USD1,406.00 mark, ie near the low of 1 Aug. This is followed by USD1,390.90, or the low of 1 Jul. Towards the upside, 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 - 25 Nov 2019