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Gold prices down, but holding steady in the face of strong U.S. new home sales

Kitco News

(Kitco News) - Gold prices remain down on the day but are seeing little reaction to stronger than expected new home sales.

New home sales rose 7.9% last month to a seasonally adjusted annualized rate of 764,000 homes, the U.S. Commerce Department said on Wednesday. December’s sales were revised up to a rate of 708,000 units from 649,000 units. According to consensus forecasts, economists were expecting to see a sales pace of 718,000 homes.

Annually, the pace new home sales are up 18.6% compared to January 2019 numbers.

According to reports this is the highest sales rate since July 2007.

Positive economic data appears to be having little impact on gold as price see little movement in initial reaction. According to some analysts the gold market is under pressure due to some technical selling pressure after hitting a new fresh seven-year high Monday. April gold futures last traded at $1,636.70 an ounce, down 0.79% on the day.

Looking at home prices, the report said that median prices were $348,200 last month with the average price above $400,000.

Avery Shenfeld, senior economist at CIBC, said that the strong January sales data bodes well for economic growth in 2020.

“This is just one more sign that housing activity will be an important growth contributor in the first half of the year, one that will be even more critical if trade and manufacturing are hit by global disruptions,” he said.

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