Gold prices remain under pressure even as U.S. existing home sales drop 0.7% in August
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(Kitco News) - The selling pressure in gold has not abated even as the U.S. housing sector continues to weaken following disappointing home sales data.
Existing home sales declined 0.7% to a seasonally adjusted and annualized rate 4.04 million units last month, compared to July’s annualized rate of 4.07 million homes, the National Association of Realtors (NAR) said on Thursday.
The latest housing data missed expectations. Market consensus projections were calling for existing home sales to pick up slight to 4.10 million units.
The gold market is not seeing much reaction to the disappointing economic data. December gold futures last traded at $1,939.50 an ounce, down 1.40% on the day.
For the year, the report said that existing home sales are down 15.3% from August 2022 levels.
"Home sales have been stable for several months, neither rising nor falling in any meaningful way," said NAR Chief Economist Lawrence Yun. "Mortgage rate changes will have a big impact over the short run, while job gains will have a steady, positive impact over the long run. The South had a lighter decline in sales from a year ago due to greater regional job growth since coming out of the pandemic lockdown."
The U.S. housing sector continues to struggle as the Federal Reserve maintains its aggressive interest rate hikes, which have driven mortgage rates higher. At the same time, low inventories is leading to higher home prices, creating another factor keeping many new home buyers out of the market.
"Home prices continue to march higher despite lower home sales," Yun said. "Supply needs to essentially double to moderate home price gains."
The report said that the supply of homes for sale last month dropped 0.9% to 1.1 million units. The current inventory of homes for sale represents a 3.3-month supply.
The report said the median existing-home price for all housing types last month was $407,100, an increase of 3.9% from August 2022.