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Gold price ticks down as U.S. existing home sales beat expectations in July

Kitco News

(Kitco News) Gold ticked down after hitting new daily highs of above $1,800 an ounce as U.S. existing home sales rose 2% in July, coming in above market expectations.

Existing home sales rose to a seasonally adjusted and annualized rate of 5.99 million units last month, compared to June’s annualized rate of 5.87 million homes, the National Association of Realtors (NAR) said on Monday. Market consensus projections were calling for existing home sales to rise to 5.83 million.

On an annual basis, July’s existing sales were up 1.5%.

The housing situation in the U.S. is still all about inventory, said Lawrence Yun, NAR's chief economist.

"We see inventory beginning to tick up, which will lessen the intensity of multiple offers," Yun said. "Much of the home sales growth is still occurring in the upper-end markets, while the mid-to lower-tier areas aren't seeing as much growth because there are still too few starter homes available."

Gold prices edged down following the data release. December Comex gold futures were last trading at $1,804.10, up 1.13% on the day. 

The median price for all home types was at $359,900 in July, rising 17.8% from a year ago. This marked the 113th straight month of year-over-year gains.

The total inventory was at 1.32 million units, down 12% from last year's total.

"Although we shouldn't expect to see home prices drop in the coming months, there is a chance that they will level off as inventory continues to gradually improve," Yun added. "In the meantime, some prospective buyers who are priced out are raising the demand for rental homes and thereby pushing up the rental rates."

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