In the overnight session, a European Central Bank board member said that the central bank would front load its purchases in bond buying to May and June. The accelerated quantitative easing program caused the euro to lose ground against the USD. As the New York session began, the euro tumbled even more with the release of strong US economic data. New construction on homes surged 20% in April, the fastest increase since late 2007. The positive housing data encouraged participants that the US economy will continue to recover after a slow first quarter.
Gold had been consolidating nicely in the $1,220 area but with the USD gaining over 1% against a basket of currencies today, bids evaporated and the yellow metal made a low on the day of $1,205.50. Immediate support is coming in at $1,200 while rallies will now likely be sold ahead of yesterday’s high of $1,232.50. Silver sold off even more than gold did and finished on the day down 3.50%. It dipped below its 200 day moving average at $17 at one point but finished the trading day above this key level.