Maintain long positions, as the correction phase is still relatively mild. The COMEX Gold continued to extend its minor consolidation phase into a third session, ending USD8.50 lower at USD1,731.70. At one point it reached a high of USD1,768 to test the USD1,760 immediate resistance. The aforementioned consolidation phase set in after the commodity recently tested the USD1,780 resistance mark. It is a healthy price development and corrects the previous sharp upward move, which saw the COMEX Gold breach above the USD1,700 mark after multiple attempts between February and early April. As long as the commodity is still able to hold above this level, the risk of it experiencing a deeper correction should still be contained. We maintain our positive trading bias.

We advise traders to stay in long positions. These were initiated at USD1,572.70, or the closing level of 23 Mar. To manage the risk, a stop-loss can now be placed below the USD1,676.50 mark.

The immediate support level is maintained at USD1,720 and followed by the USD1,700 round figure. Moving up, the immediate resistance is set at USD1,760, which is near the latest high. This is followed by the USD1,780 level.

Source: RHB Securities Research - 17 Apr 2020