Gold prices whipsawed testing higher levels but were unable to remain elevated. They initially were buoyed by weaker than expected US existing home sales which dropped in March. US yields edged higher while the dollar eases against most major currencies paving the way for elevated gold prices. Gold prices continue to form a topping pattern, but the move will not come until US rates begin to move higher.
Gold prices attempted to move higher but where met with selling pressure and ended the session slightly in the red. Resistance is seen near the recent breakdown level which came in near 1,284. Support is seen near an upward sloping trend line that comes in near 1,260. Momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices and accelerating negative momentum. The fast stochastic also generated a crossover sell signal, which points to accelerating negative momentum. The current reading on the fast stochastic is 7, which is below the oversold trigger level of 20, and could foreshadow a correction.
Us Exiting Homes Sales Drop
U s existing homes sales were weaker than expected in March. Both the high end and the low end of the market are struggling due to completely different factors. The low end is seeing lower sales due to the lack of inventory. The high end is seeing the lack of demand. Sales of the lowest-priced homes were down 13% in March compared with a year ago, according to the National Association of Realtors. The inventory of cheaper homes continues to drop. Investors snapped up lower-end homes during the last housing crisis, turning them into rentals. Sales of home that are valued at more than 1-million dollars were down 11% year over year, even though there are plenty of those homes for sale.
This article was originally posted on FX Empire