Gold Prices Under Slight Pressure Amid Mixed U.S. Housing Data
(Kitco News) - Gold prices were weaker following the release of the U.S. housing data from July, with housing starts disappointing but building permits beating expectations.
U.S. housing starts declined 4% to a seasonally adjusted annual rate of 1.191 million units in July, the Commerce Department said on Friday. Consensus forecasts compiled by most news organizations called for starts to be around 1.257 million. June’s data was downwardly revised to 1.241 million units.
At the same time, building permits data, which is a precursor to future projects, was up 8.4% at 1.336 million in July after June’s total of 1.232 million. For the year, building permits rose 1.5% from the July 2018 levels.
Disappointing housing starts have been offset by the future of what’s to come, judging from the upbeat building permits’ data, said CIBC Capital Markets Chief Economist Avery Shenfeld.
“A recent rebound in the home builders index … leans towards a view that today's starts data don't signal the start of a trend decline. A headline comment from Navarro that the US and China are talking is pushing bond yields a bit higher despite the miss on starts,” Shenfeld said.
Following the release, gold prices edged down with December Comex gold futures last trading at $1,522.40, down 0.57% on the day.
Earlier in the session, gold prices were already under some healthy pressure as risk sentiment ticked up on Friday, said Kitco’s senior technical analyst Jim Wyckoff.
“Gold prices are moderately lower in early U.S. trading Friday. Safe-haven demand has waned a bit as the U.S. and world stock markets are rallying to end the trading week. Still, from a technical and trader perspective, today’s price action in gold and silver is just normal backing and filling on the charts, which is what a bull market needs routinely to keep a price uptrend alive and healthy,” Wyckoff said.