U.S. New Home Sales Rise 4.2% Has Little Impact On Gold Prices
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(Kitco News) - The gold market continued to trade near its session lows, but is seeing little reaction to stronger-than-expected housing sector data.
Tuesday, the U.S. Commerce Department said that new home sales rose 4.5% in March, to a seasonally adjusted annualized rate of 692,000 homes, above February’s revised rate of 662,000 units. According to consensus forecasts, economists were expecting to sales of around 647,000 units.
The report said that annually, new home sales are up 3%. New home sales are at their highest level since April 2018.
Gold has been under pressure as a result of renewed momentum in the U.S. dollar, and it appears that economic data having little impact on the yellow metal. June Comex gold futures last traded at $1,270.90 an ounce, down 0.50% on the day.
Looking at prices, the report said that the median sales price of new houses sold last month was $302,700; meanwhile, the average sales price was $376,000.
The housing sector is also seeing a rising inventory. The report said that the estimate of new houses for sale at the end of March was 344,000, representing 6.0-months’ supply.
Although gold prices are suffering some economists have noted that its good news for the economy. The housing sector has been a drag on economic growth as rising home prices and mortgage rates priced many new home-owners out of the market in 2018.
“While the jump in sales is a sign that demand remains resilient, the weakness in single-family building permits suggests that homebuilders may not be expecting this trend to continue,” said Katherine Judge, senior economist at CIBC World Markets. “Admittedly, this is a volatile series, but if demand continues to hold up, homebuilding activity could pick up later in the year.”