Maintain long positions, as there is still no confirmation of a deeper correction. The COMEX Gold traded in the range of USD1,554.10 and USD1,564.40 before closing USD3.60 weaker at USD1,556.50. The relatively mild negative session did not generate a negative price signal that could point towards a deeper correction for the precious metal. Such a correction may happen should the USD1,547.40 immediate support be breached to the downside. For now, we maintain our positive trading bias.

As the bulls are still able to defend the aforementioned immediate support, 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 stop-loss can now be placed below the USD1,547.40 mark.

The immediate support is expected to emerge at USD1,547.40, which was the low of 9 Jan. This is followed by the USD1,500.00 level. Moving up, 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 - 17 Jan 2020