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Gold prices holding near session highs as U.S. pending home sales rise 0.9% in July

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(Kitco News) - The gold market continues to hold on to solid gains even as the U.S. housing sector shows signs of stabilizing as more consumers than expected have initiated the process of buying a new home.

The U.S. pending home sales index rose 0.9%, to 77.6 in July, following June's increase of 0.4%, the National Association of Realtors (NAR) said Wednesday. The data was better than expected; according to consensus forecasts, economists expected a 0.8% drop in pending home sales transactions.

However, the report noted a sharp drop compared to last year, with the index falling 14% compared to July 2022.

The gold market is largely ignoring the latest housing market data as the market consolidates near-session highs. December gold futures last traded at $1,973.40 an ounce, up 0.42% on the day.

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 small gain in contract signings shows the potential for further increases in light of the fact that many people have lost out on multiple home buying offers," said NAR Chief Economist Lawrence Yun in the report. "Jobs are being added and, thereby, enlarging the pool of prospective home buyers. However, rising mortgage rates and limited inventory have temporarily hindered the possibility of buying for many."

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