Maintain long positions. The COMEX Gold experienced strong profit taking on the first trading session of 2022. Initially, it started off on a strong note, opening at USD1,830.10. However, the brief positive momentum failed to follow through with the emergence of profit taking, which caused the commodity to drop to the day’s low of USD1,798.20 before closing at USD1,800.10. The latest bearish price action has erased the gains made in the previous week. For the immediate session, we think the bulls will attempt to defend near the 50-day SMA line. In the event the commodity breaches below the USD1,800 psychological support, or below the 20-day SMA line, expect more downside correction. For now, we retain our positive trading bias until the stop-loss is breached.

We recommend traders hold on to their long positions at USD1,811.70, ie the closing level of 23 Dec. For risk management, the stop-loss is fixed at USD1,800.

The immediate support is shifted to USD1,800, followed by the lower support at USD1,785 – ie the low of 21 Dec 2020. Meanwhile, the nearest resistance changes to USD1,815.70 (17 Dec’s high), followed by USD1,833, the high of 3 Jan.

Source: RHB Securities Research - 4 Jan 2022