Maintain short positions, as the multi-month correction phase is still developing. The COMEX Gold ended the latest session slightly lower – by USD0.70 – at USD1,480.50. Trading took place between USD1,477.40 and USD1,484.50. Overall, the precious metal is still trading under the multi-month downtrend line (as drawn on the chart) – suggesting that it continues to trade in a correction phase. For now, as long as the COMEX Gold is still capped by said downtrend line, the negative trading bias should remain.

On expectations that the correction phase could still be extending, we recommend traders 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 target 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, or the high of 3 Oct. This is followed by USD1,566.20, which was the high of 4 Sep.

Source: RHB Securities Research - 17 Dec 2019