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Gold prices holding support as U.S. existing home sales drops 5.9% in October, roughly in line with expectations

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(Kitco News) - The gold market remains under pressure, testing new support around $1.750 an ounce as the U.S. housing market saw further weakness but relatively in line with expectations.

Existing home sales fell 5.9% last month to a seasonally adjusted and annualized rate of 4.43 million units, compared to September's annualized rate of 4.71 million homes, the National Association of Realtors (NAR) said on Friday. The market consensus called for existing home sales to decline to 4.41 million.

The gold market is not seeing much reaction to the latest economic data as the U.S. dollar sees some renewed momentum heading into the weekend. December gold futures last traded at $1,754 an ounce, down 0.51% on the day.

The report said that for the year, existing home sales are down 28.4% as the nation saw broad-based declines in all four major regions.

The NAR said that rising mortgage rates due to the Federal Reserve's aggressive monetary policy action is the biggest hurdle for new home buyers.

"More potential homebuyers were squeezed out from qualifying for a mortgage in October as mortgage rates climbed higher," said NAR Chief Economist Lawrence Yun. "The impact is greater in expensive areas of the country and in markets that witnessed significant home price gains in recent years."

Along with rising mortgage rates, the report said that low inventories are also keeping home prices elevated. The total supply of homes for sale in October was 1.22 million units, down 0.8% from September. Current inventory levels represent a 3.3-month supply.

"Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers," Yun added. "In October, 24% of homes received over the asking price. Conversely, homes sitting on the market for more than 120 days saw prices reduced by an average of 15.8%."

Looking at home prices, the report said The median existing-home priceĀ for all housing types last month was $379,100, up 6.6% compared to last year's prices.

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