Maintain short positions as the correction phase is still likely to extend. The COMEX Gold experienced a positive session. At the closing, it settled USD3.60 better at USD1,467.40 – the low and high were posted at USD1,456.60 and USD1,470. However, the positive session did not provide a price signal to indicate the multimonth correction phase has reached an end. The correction phase set in to correct the precious metal’s upward move that happened between May and September. Hence, we keep to our negative trading bias.

In the absence of a price reversal signal to mark the end of the commodity’s 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.

We are keeping the immediate support 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. Conversely, 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 - 27 Nov 2019