Gold Prices Look Past U.S. Housing Data, Focus On Fed
(Kitco News) - Gold prices ticked down, but largely ignored mixed U.S. housing data from August.
The U.S. housing starts fell 0.8% to a seasonally adjusted annual rate of 1.180 million units in August, the Commerce Department said on Tuesday. Consensus forecasts compiled by most news organizations called for starts to be around 1.175 million.
July’s data was upwardly revised to 1.190 units. For the year, housing starts rose 1.4% from August 2016.
On the other hand, building permits data, which gives a glimpse into future projects, did better than expected. The report noted that building permits rose 5.7% to 1.300 million in August, up from July’s upwardly revised level of 1.230 million. On an annual basis, permits were up 8.3% compared to last year.
Gold prices remained flat, as the market paused ahead of the Federal Reserve's Open Market Committee (FOMC) meeting that begins on Tuesday and ends on Wednesday. Economists are not expecting any interest rate change, but are waiting for the Fed to announce its balance sheet reduction.
December Comex gold was last seen at $1,311.70, up 0.06% on the day, following some selling pressures in the previous trading session.
August’s housing starts data showed some more “leveling off,” said Royce Mendes, senior economist at CIBC World Markets.
“Weather likely played a factor in the slowdown, with hurricane Harvey hitting Texas during the last week of the month,” Mendes wrote in a note. “Building permits, on the other hand, increased. The faster pace was due to a pickup in multifamily units, but the overall picture of permits still suggests that the starts should begin to trend higher in the months ahead. The greenback has traded weaker in the aftermath of these data releases.”