Maintain long positions on the expectation the sideways consolidation may have completed. The COMEX Gold formed a white candle in the latest session, this was after it tested the immediate support of USD1,284.60 during the intraday. The low and high were registered at USD1,283 and US1,291.10, before it closed slightly higher by USD0.60 at USD1,289.50. The commodity’s latest price action near the said immediate support suggests the “Bearish Engulfing” formation on 4 Jan is still unconfirmed and that it is still trading in the narrow sideways consolidation zone – hence the risk for the commodity to experience a deeper retracement is contained for now. Based on these observations, we keep to our positive trading bias.

As the precious metal is still developing a healthy sideways consolidation to correct its upward move that started from the low of USD1,162.70 recorded on 16 Aug 2018, we continue to recommend traders keep to long positions – we initiated this at the USD1,216 mark, which was 14 Nov 2018’s closing level. For risk-management purposes, a stop-loss can be placed below the USD1,284.60 threshold.

Immediate support is eyed at USD1,284.60, the low of 4 Jan. This is followed by USD1,267.40, or the low of 21 Dec 2018. On the other hand, 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 - 23 Jan 2019