U.S. New Home Sales surprise on the upside in August, gold prices drop
(Kitco News) - Gold prices fell after the U.S. new home sales rose more than expected in August.
New home sales advanced 7.1% last month to a seasonally adjusted annualized rate of 713,000 homes, the U.S. Commerce Department said on Wednesday. July’s sales were revised to a rate of 666,000 units.
Market consensus called for sales to rise 3.5% to 600,000 units in August.
Gold prices remained under pressure following the data with December Comex gold futures last trading at $1,534.10, down 0.40% on the day.
Looking at home prices, the report said that the median sales price for homes sold last month was $328,400, while the average price was $404,200.
The inventory of houses for sale as of the end of August was at 326,000, representing a 5.5-month supply at current sales rate.
CIBC Capital Markets economist Katherine Judge pointed out that the upside surprise in new home sales shows that lower interest rates are working and the Fed might not need to do anything more for now.
“August's new home sales data provided another positive surprise for the US housing market … While that's still slightly below the peak reached in June, when taken with the upside surprise seen in housing starts and permits, it suggests that U.S. housing market activity is responding positively to lower rates, another reason why the U.S. economy doesn't need the extent of interest rate cuts that are priced into financial markets currently,” Judge wrote.