Maintain long positions, as the bulls are still pushing prices higher. The COMEX Gold formed a white candle to settle USD13.20 stronger at USD1,589.20. The session’s low and high were posted at USD1,576.80 and USD1,590.70. This positive session continues to reinforce our bias that the commodity has reached its retracement target at USD1,542.80 – arising from 8 Jan’s “Bearish Engulfing” formation. While we note that the RSI reading is again back to the overbought region, there are no adverse price signals that could indicate a potential price reversal. Premised on this, we are keeping to our positive trading bias.

As the upward price trajectory is showing signs of extending, we continue to recommend that 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 USD1,552.10 threshold.

We are keeping the immediate support at USD1,552.10, or the low of 21 Jan. This is followed by USD1,542.80, which was the low of 14 Jan. Towards the upside, the immediate resistance is set at the USD1,600 round figure. This is followed by USD1,619.60, ie the high of 8 Jan’s “Bearish Engulfing” formation.

Source: RHB Securities Research - 31 Jan 2020