Maintain long positions as the trend is still positive. The COMEX Gold experienced a relatively huge intraday swing as it reached a low and high of USD1,573.20 and USD1,598.50. This was before it settled USD5.50 lower at USD1,582.40. Despite the intraday negative price reversal, not too distant from the USD1,600 resistance mark, there is still no clear technical evidence to indicate the precious metal’s upward move is poised for a deeper correction. For now, provided the immediate support of USD1,567.90 is not breached, we are keeping our positive trading bias.

As the upward move since the low of USD1,542.80 registered on 14 Jan is not flashing out price exhaustion signals, 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 USD1,567.90 level.

Immediate support is kept at USD1,567.90, the low of 29 Jan. This is followed by USD1,552.10, or the low of 21 Jan. Moving up, the immediate resistance is expected to emerge 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 - 4 Feb 2020