Gold Prices Remain Neutral Near Six-Year High Following Weak U.S. Pending Home Sales
(Kitco News) -Gold prices are holding steady in neutral territory after fewer consumers started the process of buying a new home, according to the latest data from the National Association of Realtors (NAR).
Thursday the association said that its pending home sales index fell 2.5% in July, compared to June’s 2.8% rise. The numbers were weaker than expected as economists were expecting to see an unchanged reading.
Gold prices were hovering near their recent six-year highs ahead of the report and are seeing little movement in initial reaction to the disappointing employment data. December gold futures last traded at $1,550 an ounce, relatively unchanged on the day.
Economists closely watch the pending home sales numbers because the index is seen as a barometer for the housing market. A lag of a month or two usually exists between a contract and a completed sale.
The housing sector has been a drag on U.S. economic growth for nearly a year and lower mortgage rates, due to falling interest rates has not been enough to spur new spending. Pending home sales were down 0.3% in the 12 months through July.
Super low mortgage rates have not yet consistently pulled buyers back into the market,” said Lawrence Yun, the NAR’s chief economist. “Economic uncertainty is no doubt holding back some potential demand, but what is desperately needed is more supply of moderately priced homes.”