Gold prices lose some altitude as U.S. pending home sales plunge in April
(Kitco News) Gold prices lost some early-morning gains as the U.S. pending home sales surprised on the downside, marking a second monthly decline in a row amid the coronavirus outbreak.
The U.S. pending home sales were down 21.8% in April - the biggest decline since the association began recording the data in 2001. Consensus forecasts were calling for a 15% decrease.
The pending home sales index came in at 69.0 in April, down from March’s reading of 88.2.
The bad news is that the COVID-19 outbreak is impacting housing sentiment, but the good news is that April is looking like the lowest point in this crisis, according to NAR chief economist Lawrence Yun.
“With nearly all states under stay-at-home orders in April, it is no surprise to see the markedly reduced activity in signing contracts for home purchases,” Yun said. “While coronavirus mitigation efforts have disrupted contract signings, the real estate industry is ‘hot’ in affordable price points with the wide prevalence of bidding wars for the limited inventory. In the coming months, buying activity will rise as states reopen and more consumers feel comfortable about homebuying in the midst of the social distancing measures.”
Economists watch closely the pending home sales numbers because the index is seen as a forward-looking barometer for the housing market. A lag of a month or two usually exists between a contract and a completed sale.
Gold prices edged down from daily highs following the publication of the report. June Comex gold futures were last trading at $1,719.30, up 0.50% on the day.