US Housing Data Supports Metals in the Short Term

Weak housing data fueled buyers to take positions. In any case, gold rebound seems to be short-lived as the dollar index remains strong, and the good US retail sales data is still in play.
Mauricio Carrillo
US Housing Data Supports Metals in the Short Term
US Housing Data Supports Metals in the Short Term

Gold, silver and other metals are posting gains amid bad housing data in the United States. However, a firm dollar is containing movements.

In the United States, Building Permits declined 6.1% in June, well below the 0.1% retracement expected by market. Housing starts dropped 0.9% also in June, against the 1.9% increase expected by experts.

Gold tests the 1,400 area, but recovers after US housing data

XAUUSD daily chart July 17

Gold is recovering ground on Wednesday after bouncing back from the 1,400 area earlier in the day. US housing data fueled a metal that is under pressure amid a strong dollar index.

XAU/USD is currently trading at 1,407, 0.05% positive on the day. The metal is maintaining levels between the small range between 1,400 and 1,420 it has been trading in the last three days.

As FX Empire analyst reported in a recent article, “the selling is being fueled by so-called safe-haven buyers who are liquidating speculative positions placed as a hedge against escalating tensions in the Middle East.”

However, weak housing data fueled buyers to take positions. In any case, the rebound seems to be short-lived as the dollar index remains strong, and the good US retail sales data is still in play.

To the downside, gold shows support at the 1,400 area right now. Below there, please check the 1,380 level as an immediate buying area. Then, 1,360 will attract more buyers.

To the upside, the pair needs to clear up the 1,420 level and then test the 1,440 resistance to give hopes for bulls. Above there, 1,480 is waiting for the metal.

Silver breaks above 15.50 and sends a bullish flag

XAGUSD daily chart July 17

Silver is trading positive for the fourth straight day as investors are taking positions ahead of a possible interest rate cut in the Federal Reserve.

On Wednesday, XAG/USD is extending gains above the 15.50 level that the metal broke on Tuesday. “This is obviously very bullish turn of events,” said Christopher Lewis in an FX Empire article, “and it now looks as if we are going to go towards the $15.75 level, which is typical of this market, moving in $0.25 increments.”

Currently, XAG/USD is trading at 15.67, 0.80% positive on the day. Following Lewis reasoning, next resistance is at 15.75, where the unit is virtually pricing right now.

Above there, 15.90 and 16.00 are levels to watch, but the frontier lies at 16.20, February highs.

However, the chart pattern suggests a brief period of consolidation in the short term. Even a pullback to the 15.50 area before starting another run for the mentioned resistances.

Metals report for July 17, 2019

Copper was unable to maintain highs at 2.7330 on Tuesday, and it fell to close negative at 2.6920. So, on Wednesday, the unit is consolidating levels around 2.6915, as the unit is 0.75% down on the day.

XCU/USD is currently testing 2.6860, where a confluence of the 50-day and 20-day moving averages are located. Below there, 2.6500 and 2.600 are the levels to watch.

Palladium is attempting to post a daily recovery candle on Wednesday again after it closed Tuesday with sharp losses. Today, the unit is extending recoveries from the 1,505 area.

Currently, XPD/USD is trading 1.40% positive on the day at 1,545. The unit is facing resistances at 1,550 and 1,570. However, technical studies are suggesting that the unit doesn’t have enough bullish sentiment to recover ground, and a retest of the 1,500 area is expected.

Platinum is trading down for the second straight day as the 850.00 area rejected the unit on Tuesday, and it is now testing the 200-day moving average at 830.70. XPT/USD is trading 0.30% down on the day.

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