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 Februaryâ€™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.”