Maintain long positions as the “Bearish Engulfing” formation is still unconfirmed. The yellow metal weakened in the latest trading session and at one point slipped below the immediate support of USD1,284.60. The COMEX Gold managed to pull itself off from the intraday low of USD1,281.50 to settle at USD1,285.90 – while the high was at USD1,290. While the said immediate support has been under pressure in recent sessions, until the immediate support is breached decisively at the closing, we still regard the price pattern that has developed since the “Bearish Engulfing” formation on 4 Jan as a narrow sideways consolidation. Considering this, we keep our positive trading bias.

As there is no confirmation that a deeper retracement may be developing, we continue to advise traders stay in 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 still set at USD1,284.60, or the low of 4 Jan. Breaking this may see market test USD1,267.40, which was the low of 21 Dec 2018. Meanwhile, resistance is expected at USD1,332.40, ie the high of 11 May 2018. This is followed by USD1,370.50, or the high of 25 Jan 2018.

Source: RHB Securities Research - 25 Jan 2019