Maintain long positions as there is no signal for a deeper retracement yet. The COMEX Gold traded in a relatively wide trading range in the latest session of between USD1,552.10 and USD1,574.80. This was before it eased USD2.40 to close at USD1,564.10. Despite the negative intraday price reversal, there is no adverse price signal that could indicate a potential deeper correction phase, arising from 8 Jan’s “Bearish Engulfing” formation. Based on the recent sessions’ price performance, we are now of the view the risk for a deeper correction to take place could be signalled by the downside breach of the latest session’s low. Until this happens, we are keeping our positive trading bias.

Without a price 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 USD1,552.10.

We revise the immediate support to USD1,552.10, followed by USD1,542.80, the low of 14 Jan. Conversely, the immediate resistance is now pegged at USD1,574.80, the latest high, followed by USD1,600, a round figure.

Source: RHB Securities Research - 22 Jan 2020