Risk of a deeper correction is under control; maintain long positions. The COMEX Gold continued to show signs of extending its rebound from the immediate support of USD1,547.40, which was tested in the prior session. At the close, the precious metal advanced USD9.20 to close at USD1,560.10 – trading ranged between USD1,552.90 and USD1,564.80. On the observation that the bulls are still able to maintain prices above the said immediate support, we believe the risk of the precious metal developing a deeper correction, arising from 8 Jan’s “Bearish Engulfing” formation, is still contained. Hence, we are keeping our positive trading bias.

As there is no signal for a deeper correction to develop, we continue to recommend traders stay in long positions. We initiated these at USD1,529.30, or the closing level of 31 Dec 2019. For risk-management purposes, a stoploss can now be placed below the USD1,547.40 mark.

The immediate support is eyed at USD1,547.40, which was the low of 9 Jan. This is followed by the USD1,500.00 level. Conversely, the immediate resistance is eyed at USD1,619.60, which was the high of 8 Jan’s “Bearish Engulfing” pattern. This is followed by the USD1,650.00 mark.

Source: RHB Securities Research - 16 Jan 2020