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Gold price remain firm following strong U.S. housing construction data

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(Kitco News) - The gold market is holding on to its bullish momentum even as housing construction data ended 2020 on a strong note.

Thursday, the Commerce Department said that U.S. April housing starts rose by more than 5.8% to a seasonally adjusted annual rate of 1.669 million units.

Consensus forecasts compiled by most news organizations called for starts to be around 1.60 million units.

Gold is seeing little reaction to the latest housing sector data. February gold futures last traded at $1,870.20 an ounce, unchanged on the day.

Meanwhile, the Commerce Department said the tally of building permits – important as an indicator of future construction activity – rose by 4.5% in December to an annualized rate of roughly 1.709 million and relatively in line with expectations.

The U.S. housing market has been a strong pillar of support for the U.S. economy. Katherine Judge, senior economist at CIBC noted that December’s housing data was the stronger reading since 2006.

“The sizeable gain coincided with an unseasonably mild month in terms of weather. There has been an overhang of building permits that has persisted for months, and permit issuance accelerated unexpectedly to a 1709K pace in December,  driven entirely by the single-family segment, and signaling continued strength for housing starts ahead, in line with limited inventories of homes for sale on the market,” she said.

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