Maintain short positions as the retracement phase has yet to reach its bottom. The COMEX Gold settled the latest session marginally lower by USD0.20 at USD1,464.90. The low and high were posted at USD1,463 and USD1,469.80. The precious metal’s multi-month correction phase, which started in early September, is still not showing signs of reaching an end. For now, this negative bias would stay as long as the commodity is still capped by the downtrend line (as drawn on the chart). Towards the downside, there is a good possibility for the 200-day SMA line to be tested. Maintain our negative trading bias.

As the multi-month correction phase has yet to see its completion, 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.

Immediate support is expected 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 - 10 Dec 2019