Gold Prices Ignore 12% Meltdown In U.S. Housing Construction
(Kitco News) - Gold prices remain under pressure hovering near a 12-month low Wednesday as the latest U.S. housing data weakened more than expected.
The Commerce Department's latest economic data showed that U.S. housing starts fell 12.3% in to a seasonally adjusted annual rate of 1.17 million units in June, down from May's revised rate of 1.3 million. Consensus forecasts compiled by most news organizations called for starts to be around 1.32 million.
According to reports, housing starts have fallen to a nine-month low.
Annually, housing construction dropped 3% from June 2017.
Meanwhile, the Commerce Department said the tally of building permits – important as an indicator of future construction activity – fell by 2.2% last month to an annualized rate of 1.273 million, down from May's revised rate of 1.312 million. Economists were expecting to see an increase to 1.32 million.
However, the disappointing data haven't had much of an impact on gold prices, which have been mired in a three-month downtrend. Economic data are not having much impact on gold as investors are laser-focused on surging momentum in the U.S. dollar
August gold futures last traded at $1,224.60 an ounce, down 0.24% on the day.
According to some economists, the housing market faces strong headwinds as rising interest rates boost mortgages, forcing some first-time home buyers out of the marketplace.
Katherine Judge, senior economist at CIBC World Markets, dismissed the weaker-than-expected report, highlighting the fact that construction is still at healthy levels.
“Builder confidence remains intact as indicated by the elevated NAHB homebuilding index and robust price growth should continue to incentivize homebuilding going forward,” she said.