Gold Lingers Near 6-Month Lows As U.S. Existing Home Sales Disappoint
(Kitco News) - Gold prices were continuing to trade lower on the day after U.S. consumers bought less pre-existing homes in May, according to the latest report from the National Association of Realtors (NAR).
Existing home sales edged down 0.4% last month to a seasonally adjusted and annualized rate of 5.43 million units, compared to April’s annualized rate of 5.45 million homes, the association said on Wednesday. Economists were expecting to see a 1.5% advance to 5.52 million units.
Gold prices were relatively unchanged immediately after the data was released, but continued to trade weaker on the day, with August Comex gold last seen at $1,276.10, down 0.20% on the day. Earlier in the session, gold hit another six-month low despite heightened trade tensions.
Kitco’s senior technical analyst Jim Wyckoff said that the yellow metal is behaving like a raw commodity in its reaction to the U.S.-China trade spat.
“The yellow metal can’t hold a bid despite some risk aversion seen in the marketplace this week, due to worries about a global trade war. It seems the specter of less commerce in raw commodities if a trade war would break out is trumping safe-haven buying. Indeed, gold at present is acting like a raw commodity instead of a safe-haven asset,” Wyckoff said in his AM Roundup.
Existing-home sales fell for the second straight month in a row in May, with only the Northeast region seeing an uptick, NAR said in the report.
But, NAR chief economist Lawrence Yun pointed out that home purchases should pick up later this summer.
“Closings were down in a majority of the country last month and declined on an annual basis in each major region,” Yun said. “Incredibly low supply continues to be the primary impediment to more sales, but there’s no question the combination of higher prices and mortgage rates are pinching the budgets of prospective buyers, and ultimately keeping some from reaching the market.”
The median price for all existing-home types in May was $264,800, up 4.9% from last year, which marked the 75th straight month of year-over-year gains. At the same time, the association said that total inventory as of the end of May climbed 2.8% to 1.85 million existing homes available for sale.
“Inventory coming onto the market during this year’s spring buying season – as evidenced again by last month’s weak reading – was not even close to being enough to satisfy demand,” added Yun.