Gold price ticks down as U.S. pending home sales surprise on the upside in June
Editor's Note: The article was updated to reflect changes in prices.
(Kitco News) Gold prices edged down as the U.S. pending home sales surprised on the upside in June, rising 16.6% after a record month in May.
Consensus forecasts were calling for an increase of 15%.
The pending home sales index came in at 116.1 in June, up from May’s reading of 99.6, according to the National Association of Realtors (NAR).
Also, pending home sales were up 6.3% from a year ago, despite the COVID-19 pandemic uncertainty.
“It is quite surprising and remarkable that, in the midst of a global pandemic, contract activity for home purchases is higher compared to one year ago,” said NAR’s chief economist Lawrence Yun. “Consumers are taking advantage of record-low mortgage rates resulting from the Federal Reserve’s maximum liquidity monetary policy.”
Very positive numbers from June and May have triggered an upward revision in NAR’s forecast for all of 2020. The association now expects existing-home sales to decline only 3% and new home sales to rise by 3%.
“Mortgage rates are anticipated to stay at near 3% over the next 18 months. Home prices will likely appreciate 4% in 2020, before moderating to 3% in 2021 as more new supply reaches the market, according to Yun,” the report said.
Economists pay close attention to 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 ticked down soon after the publication of the report. August Comex gold futures were last trading at $1,940.20, down 0.23% on the day.