Gold retained overnight losses on Thursday as the US Dollar strengthened versus the Euro and equities rose. The Greenback climbed 0.5% against a basket of major currencies on Wednesday as the Euro slid ahead of the European Central Bank's meeting later in the day. Risk appetite also supported global shares, which tracked oil prices higher. Crude advanced 4% yesterday as US crude stocks rose less than expected.
Sales of previously-owned homes recovered more than expected in March after plunging in February, indicating the housing market recovery remained intact despite signs of economic slowdown in the first quarter. According to the National Association of Realtors, existing home sales soared 5.1% to an annual rate of 5.33 million units last month. Economists had expected sales increasing 3.5% to a 5.30 million-unit pace in March. February's sales pace was revised slightly down to 5.07 million units from the previously reported 5.08 million units. March sales were up 1.5% from a year ago. The housing sales numbers have been quite volatile in the first quarter of 2016. March's rebound comes after a sturdy start to the year in January, when sales reached their fastest pace in six months, followed by a decline in February. The US housing is being supported by a buoyant labour market, which has led to acceleration in household formation. Nevertheless, sales remain constrained by a dearth of homes available for sale, which is limiting choices for buyers. At March's sales pace, it would take 4.5 months to clear the stock of houses on the market, up from 4.4 months in February. A six-month supply is considered as a healthy balance between supply and demand. The median house price increased 5.7% from a year ago to $222,700 last month.
Canadian wholesale sales disappointed in February, recording the biggest monthly fall in more than a year amid steep declines in the machinery and auto sectors. Wholesale trade dropped 2.2% from January to a seasonally adjusted C$55.77 billion, Statistics Canada reported. Economists' expectations were for a 0.4% retreat. The fall was the largest since the 3.6% decline recorded in January 2015. Lower sales were registered in five of seven subsectors, accounting for 66% of total wholesale trade. In volume terms, sales dropped 1.9%, while inventories climbed 0.2% to C$73.16 billion. Wholesale sales data is another sign, along with a decline in February manufacturing shipments, that Canada's gross domestic product is likely to be weak for February. The GDP report is due out next week. Last week, the Bank of Canada maintained its benchmark interest rate unchanged at 0.5%, referring to the positive impact of new fiscal measures from the federal government. However, the central bank warned that the Canadian economy continues to face strong economic headwinds, including sluggish foreign demand and a recent currency rally, which could slow growth in the non-resource sector. Canada's resource-reliant economy has experienced the biggest hit among Group of Seven economies from the commodity-price plunge.
Upcoming fundamentals: Central bank meetings and US Philly Fed data in focus
Gold: recovery hopes remain in place
Yesterday the yellow metal was growing as high as 1,258 or above the first weekly resistance line. Later, however, the bullish US Dollar sent gold prices below 1,245 where the trading closed. However, our bullish estimates remain intact as the price is provided with support from the monthly and weekly pivot points. Moreover, the 20 and 55-day SMA are safeguarding the area between 1,238.31 and 1,233.11. The current April high of 1,262.72 is maintaining its status of the main short-term bullish goal. Meanwhile, there are no "sell" signals provided by any daily or weekly technical indicators today.Sentiment drops; now at lowest level in 4.5 weeks
Spreads (avg,pip) / Trading volume / Volatility
Market participants foresee the price of gold at 1,275 by the end of July
Traders who were asked regarding their longer-term views on gold between March 21 and April 21 expect, on average, to see the metal around 1,275 by the end of July. Generally, 64% (+1%) of participants believe the price will be above 1,250 in ninety days. Alongside, 22% of those surveyed reckon the price will trade in the range between 1,100 and 1,250 over the next three months.