Maintain short positions as correction is likely not complete. The COMEX Gold formed a third consecutive candle, settling USD3.40 higher at USD1,573.40. This was after it recently tested the USD1,552.10 support level – nevertheless, the bulls are still not able to push prices above the immediate resistance of USD1,575. Despite the positive performance, we still believe the precious metal is in the process of developing a correction phase. This bias would stay as long as it continues to trade below the USD1,600 mark. Maintain our negative trading bias.

On the bias that the correction phase may still be able to extend further, we maintain our short positions recommendation. We initiated these at USD1,555.50, the closing level of 4 Feb. For risk-management purposes, a stop-loss can be placed above the USD1,600 level.

Towards the downside, the immediate support is set at USD1,552.10, or the low of 21 Jan. This is followed by USD1,542.80, the low of 14 Jan. Meanwhile, the immediate resistance is set at USD1,575, derived from 4 Feb’s candle. This is followed by the USD1,600 round figure.

Source: RHB Securities Research - 10 Feb 2020