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Gold Prices Ignore Mixed U.S. Housing Construction Data

Kitco News

(Kitco News) - The gold market is holding near session highs above critical resistance but is mostly ignoring mixed U.S. housing construction data.

The Commerce Department's latest economic data showed that U.S. housing starts rose 9.2% in to a seasonally adjusted annual rate of 1.1.282 million units in August, up from July’s revised rate of 1.174 million. Consensus forecasts compiled by most news organizations called for starts to be around 1.24 million.

For the year, housing construction is up more than 9%, compared to activity in 2017.

Meanwhile, the Commerce Department said the tally of building permits – important as an indicator of future construction activity – fell by 5.7% last month to an annualized rate of 1.229 million, down from July’s revised rate of 1.303 million. Economists were expecting to see an increase to 1.31 million permits.

For the year building permits are down 5.5% from August 2017.

The gold market has not been reacting much to any economic data as it continue to follow the U.S. dollar. The yellow metal is holding on to recent gains but is unchanged in initial reaction to the latest housing data; December gold futures last traded at $1,209.60 an ounce up 0.57% on the day.

Katherine Judge, senior economist at CIBC World Markets said that the latest data could indicator a peak in construction in the housing data, even if there is still some short-term momentum still in the pipeline.

“Housing starts have not displayed any upward momentum since the start of the year, a sign that homebuilding either has peaked or is very close to its peak, she said. “Overall, while housing market activity is poised to moderate in the medium term as household formation slows and higher interest rates start to erode affordability, demand in the near term should remain fairly solid, helped by rising wages.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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