Maintain short positions at below the USD1,745 mark. The COMEX Gold continued to extend its rebound for a second consecutive session, adding USD16.10 to close at USD1,720.3 – the high was posted at USD1,731.50. At this juncture, we still hold the view that the correction phase – which started from the high of USD1,788.80 on 14 Apr – remains in place. It should stay this way, as long as the precious metal is still capped by the USD1,745 immediate resistance. This ongoing correction phase is meant to rectify the previous upward move, which took place between mid-March and mid-April. We maintain our negative trading bias.

As we are not seeing a price signal that suggests the correction phase has reached an end, we advise traders to stay in short positions. These were initiated at USD1,701 – the closing level of 30 Apr. For risk-management purposes, a stop-loss can be placed above the USD1,745 threshold.

The immediate support is maintained at the USD1,700 round figure, followed by USD1,666.20, or the low of 21 Apr. Moving up, the immediate resistance is eyed at USD1,745, which is near the high of 30 Apr. This is followed by USD1,765, ie near the high of 23 Apr.

Source: RHB Securities Research - 5 May 2020