Intraday negative reversal could mark the end of sideways move; maintain short positions. The COMEX Gold failed to sustain its intraday positive tone – it fell USD4.20 at the close to settle at USD1,480.20. The low and high were registered at USD1,476.70 and USD1,489.90. This negative session could probably mean the precious metal’s multi-week sideway consolidation phase has completed. Chances are high that its retracement leg, which started from the high of USD1,566.20 on 4 Sep, is resuming. On these technical interpretations, we keep to our negative trading bias.

As said correction may be resuming, 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. Conversely, the immediate resistance is set at USD1,525.00, ie the high of 3 Oct. This is followed by USD1,566.20, which was the high of 4 Sep.

Source: RHB Securities Research - 5 Dec 2019