Gold price pushing higher following 2.2% drop in U.S. pending home sales
(Kitco News) - The gold market is holding above its session lows and attracting some new bullish momentum even as U.S. consumers start the process of buying a home.
U.S. pending home sales index dropped 2.25 to 122.4 in November, the National Association of Realtors (NAR) said Wednesday. The consensus forecast called for an advance of 0.6%.
For the year pending home sales are down 2.7%, the report said.
“"There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices," said Lawrence Yun, NAR's chief economist. "While I expect neither a price reduction, nor another year of record-pace price gains, the market will see more inventory in 2022 and that will help some consumers with affordability."
Gold prices are off their session lows and are testing resistances back at $1,800 an ounce. Spot gold prices last traded at $1,799.60 an ounce, down 0.37% on the day.
While the gold market is seeing some solid bullish price action, market analysts note that low trading volume during the holidays can create volatile moves in the marketplace.
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.
Looking ahead, Yun said that a countrywide surge of the omicron variant poses a risk to the housing market's performance, as buyers and sellers are sidelined, and home construction is delayed.