Initiate long positions, as the bulls are signalling a return of control. The COMEX Gold continued to extend its recent sessions’ positive momentum, ending the latest trade USD4.70 higher at USD1,529.30. The positive performance placed the precious metal above the previous immediate resistance of USD1,525.00 – suggesting a decisive break away from the downtrend line (as drawn on the chart). These indicate chances are high that the multi-month correction phase has likely completed – the commodity could now be on the path towards extending its uptrend. Premised on these factors, we switch our trading bias to positive. Our previous short positions were initiated at USD1,464.10, or the closing level of 11 Nov 2019. They were closed out at USD1,525.00 in the latest session. On expectations that the bulls are resuming control, we initiate long positions at the latest close. For risk-management purposes, a stop-loss can be placed below the USD1,500.00 mark. The immediate support is revised to USD1,500.00, a round figure. This is followed by USD1,453.10, or the low of 12 Nov 2019. On the other hand, the immediate resistance is now pegged at the USD1,566.20 level, which was the high of 4 Sep 2019. Breaking this may see market test USD1,600.00 – a round figure.

Source: RHB Securities Research - 2 Jan 2020