Gold prices ignore strong rise in U.S. housing construction data
(Kitco News) - Gold prices remained under pressure, but are seeing little movement after a Commerce Department report showing that U.S. housing starts rose by 12.3% to a seasonally adjusted annual rate of 1.36 million units last month.
Consensus forecasts compiled by most news organizations called for starts to be around 1.25 million to 1.26 million units. The July tally was revised to 1.215 million units.
Meanwhile, the Commerce Department said the tally of building permits – important as an indicator of future construction activity – rose by 7.7% last month to an annualized rate of 1.42 million. Economists were expecting to see a reading around 1.31 million.
Gold has been holding above critical support at $1,500 an ounce as traders wait for the latest Federal Reserve monetary policy decision, which will be released later today. Economic data has had little impact on the yellow metal. December gold futures last traded at $1,511.6 an ounce, down 0.12% on the day.
According to some economists, the better than expected construction data is welcome news for the housing sector which has struggled for nearly a year.
“Lower interest rates appear to be working to support the US housing market,” said Katherine Judge, senior economist at CIBC. “Single-family homebuilding appears to be on more solid footing than it was on in Q2, and a further pickup in permits issued for that category bodes well for the homebuilding outlook in the months ahead.”