Bears are still in control over the trend; maintain short positions. The COMEX Gold softened by USD3.50 to settle at USD1,469.20. This came after it reached a low and high of USD1,459.80 and USD1,471.70. On a broader view, the precious metal is still seen as trading in a multi-month correction phase. This is meant to correct its previous upward move that took place between May and September. In the absence of a price reversal signal to mark an end to the said correction phase, we keep to our negative trading bias.

As the bears could still be able to push the correction even deeper, 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. 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 - 3 Dec 2019