Maintain long positions as bulls are still in control. The yellow metal softened in the latest session to end at USD1,294.90, indicating a relatively minor decline of USD3.10. The session’s high and low were at USD1,301.30 and USD1,293.10. Nevertheless, the price performance was still confined within the narrow sideway trading range that has been in development since the appearance of the “Bearish Engulfing” pattern on 4 Jan. Based on the current landscape, once this sideway consolidation is over, the commodity may still be able to extend its positive price trajectory. Risk of a deeper retracement may only develop if the immediate support is breached. Based on these observations, we keep to our positive trading bias.

As there is no follow-through from the said “Bearish Engulfing” formation, we continue to recommend traders to keep to long positions – we initiated this at the USD1,216 mark, which was 14 Nov 2018’s closing level. For riskmanagement purposes, a stop-loss can be placed below the USD1,284.60 threshold.

Immediate support is maintained at USD1,284.60, ie the latest session’s low. The second support is at USD1,267.40, or the low of 21 Dec 2018. Conversely, the immediate resistance is expected at USD1,332.40, which was the high of 11 May 2018. This is followed by USD1,370.50, or the high of 25 Jan 2018.

Source: RHB Securities Research - 16 Jan 2019