Maintain short positions, as the correction phase is not showing signs of completion. The COMEX Gold formed a white candle to close USD11.90 higher at USD1,472.70. This was after it hit a low and high of USD1,459.10 and USD1,472.90. Despite the encouraging session, the precious metal did not produce a positive price reversal signal, which could mark an end to its multi-month correction phase. For now, as long as it is still trading below the downtrend line (as drawn on the chart), we are keeping our negative trading bias.

On the bias that the correction should still be able to extend further, 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.

Towards the downside, immediate support is pegged 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. On the other hand, 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 - 2 Dec 2019