Yesterday, economic data showed that sales of existing US homes rose by the highest amount since 2013. The figure came in at 5.19 million annualized for the month of March which beat the median forecast by economists of 5.04 million. The Mortgage Bankers Association also reported a 2.3% increase in mortgage applications on the week after a decrease for the previous week.
The positive US data sent gold immediately lower. Stops were triggered around $1,192 and gold made a swift move to the low of the day at $1,185 basis the active June gold futures contract. Far East physical buying helped lift the yellow metal from the lows and it traded sideways for the rest of the trading session though. The $1,180 – $1,185 area has now been tested and has held on six separate occasions over the past month. This is a key area to watch and if it gives way, there is no major technical support until $1,150. Silver decisively moved below $16 yesterday and this has now become near term resistance. Silver’s trend has been lower of late though and any rallies will likely be viewed as opportunities for traders to establish or increase short positioning.