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Gold price erases a chunk of morning losses as U.S. existing home sales beat expectations in December

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(Kitco News) Gold price reversed some of the early-morning losses as U.S. existing home sales came in above expectations in December.

Existing home sales rose 0.7% last month to a seasonally adjusted and annualized rate of 6.76 million units, compared to November’s annualized rate of 6.71 million homes, the National Association of Realtors (NAR) said on Friday.

The advance comes following a decline of 2.2% in November. Economists were expecting to see a decrease of 2% to 6.55 million units in November.

Total home sales from 2020 marked their highest level since 2006, the report said. “Activity in the major regions was mixed on a month-over-month basis, but each of the four areas recorded double-digit year-over-year growth in December,” the NAR said. 

Gold prices advanced, erasing about half of the early-morning losses. February Comex gold futures were last trading at $1,852.40, down 0.72% on the day, after hitting a low of $1,836,30 earlier in the session.

Overall, home sales were up 22.2% on an annual basis, with the momentum projected to carry through to the new year, said Lawrence Yun, NAR's chief economist.

"Although mortgage rates are projected to increase, they will continue to hover near record lows at around 3%," Yun said. "Moreover, expect economic conditions to improve with additional stimulus forthcoming and vaccine distribution already underway."

The median price for all home types was $309,800, up 12.9% from last year, marking the 106th straight month of annual gains.

The total inventory was at 1.07 million units, down 16.4% from November and down 23% from last year’s total. This marks the lowest level of inventory since the tracking began in 1982.

Live 24 hours gold chart [Kitco Inc.]

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