Gold prices holding near session highs as U.S. pending home sales index rises 8.1% in January
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(Kitco News) - The gold market continues to benefit from solid technical buying as bargain hunters ignore stronger-than-expected U.S. housing market data.
The U.S. pending home sales index rose 8.1% in January, rising to 82.5, following a drop of 2.5% in December, the National Association of Realtors (NAR) said on Monday. The consensus forecast called for an increase of 0.9%.
This is the second consecutive month the leading housing market report beat economists' expectations.
"Buyers responded to better affordability from falling mortgage rates in December and January," said NAR Chief Economist Lawrence Yun.
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.
The better-than-expected housing market data is not having much impact on gold prices as investors bargain hunt in the marketplace after prices fell to a nine-week low overnight. April gold futures last traded at $1,825.50 an ounce, up 0.46% on the day.
While's January's data highlights a potential recovery in the U.S. housing market, the report noted that in the last 12 months, the index is down 24.1%.
Although the U.S. economy has shown resilient strength in the first month of the new year, the NAR is still looking for existing home sales to drop 11.1% in 2023 with an annual sales rate of 4.47 million units. At the same time, the housing sector is expected to recover in 2024, with sales expected to increase 17.7%.
"Home sales activity looks to be bottoming out in the first quarter of this year, before incremental improvements will occur," Yun said. "But an annual gain in home sales will not occur until 2024. Meanwhile, home prices will be steady in most parts of the country with a minor change in the national median home price."