Initiate long positions as the multi-week correction may have ended. The COMEX Gold added USD5.90 to close at USD1,513.80, this came after it reached a low and high of USD1,501.70 and USD1,525.80. The positive session, which placed the commodity further above the USD1,500 mark, suggests the recent low of USD1,465 has likely marked the end of the commodity’s multi-week correction phase. By extension, chances are high that the commodity is ready to resume its upward move. This positive bias could be further enhanced, should the downtrend line (as drawn on the chart) be crossed in the coming sessions. Switch our trading bias to positive.

Our previous short positions initiated at USD1,511.10, which was the closing level of 9 Sep, were closed out at the breakeven in the latest session. On the bias that the said correction phase has concluded, we initiate long positions. For risk-management purposes, a stop loss can be placed below USD1,465.

Immediate support is revised to USD1,465, which was the low of 1 Oct. This is followed by the USD1,406 mark, near the low of 1 Aug. Conversely, the immediate resistance is maintained at USD1,543.30, the high of 24 Sep. This is followed by USD1,566.20, which was the high of 4 Sep.

Source: RHB Securities Research - 4 Oct 2019