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David Becker
gold

Gold prices moved lower but bounced at session lows as weaker than expected housing data was offset by hawkish fed minutes.  The yellow metal bounced at trend line support near 1,321, and could test target resistance near the 10-day moving average at 1,335. Momentum has turned negative as the MACD (moving average convergence divergence) index recently generated a crossover sell signal.  This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).

U.S. existing home sales fell

U.S. existing home sales fell 3.2% to 5.380 million in January, weaker than expected, after dropping 2.8% to 5.560 million in December (revised from 5.570 million; November was revised lower to 5.720 million from 5.780 million. It’s the lowest since September’s 5.370 million. Single family sales declined 3.8% after falling 2.0% previously, while condo/coop sales bounced 1.6% after December’s 9.0% tumble. Sales in all four regions declined. The supply of homes edged up to 3.4 from 3.2, but remains low and a major obstacle to sales. The median sales price fell to $240,500 from $246,500, but the price is up 5.8% year over year.

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U.S. chain store sales fell

U.S. chain store sales fell 0.6% to 115.8 in the week ended February 17 after rising 1.8% to 116.5 in the week before. The 12-month pace of sales rose to a 2.1% year over year clip compared to the same week in 2017, versus 1.6% year over year previously. Strength was noted in dollar stores. There was some likely last minute Valentine’s day shopping and with some looking to take advantage of Presidents’ Day promotions. There could be some boost to sales this quarter with Easter earlier this year, April 1, versus April 16 in 2017.

U.S. MBA mortgage market index sank

U.S. MBA mortgage market index sank 6.6% in data released earlier, combined with a 6.2% slide in the purchase index and a 7.1% slump in the refinancing index for the week ended February 16. The average 30-year fixed mortgage rate rose 7 basis points to 4.64% to the highest level since January 2014 after U.S. inflation data came in on the hotter side and appeared to corroborate the prior uptick in hourly earnings. That will do little to inhibit the Fed from resuming its gradual tightening path in March, as market yields catch up with its policy normalization, though the Powell Fed may be chastened somewhat by increased market volatility and tightening of financial conditions.

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