Maintain short positions, as there is no price reversal signal. The COMEX Gold ended the latest session on a positive note – adding USD0.89 to close at USD1,481.20. This came after it reached a low and high of USD1,465.50 and USD1,482.50. The positive session did not indicate that the precious metal’s multi-month correction phase, which started from the high of USD1,566.20 on 4 Sep, has reached an end. Additionally, it is still capped by the downtrend line (as drawn on the chart). Premised on this, we keep to our negative trading bias.

On the bias that said correction phase has yet to reach bottom yet, 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 set 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. Moving up, 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 - 16 Dec 2019