(Kitco News) - The gold market continues to be dominated by technical momentum as prices continue to hover just above support at $1,800 an ounce.
The precious metal is not able to attract any new bullish momentum even as the U.S. housing market saw weak construction data for April.
Housing starts fell .02% to a seasonally adjusted annual rate of 1.724 million units last month, the Commerce Department said on Wednesday. At the same time, data for March was revised lower to a rate of 1.728 million units from the previously reported 1.79 million units.
However, for the year home construction is up 14.6%, the report said.
The latest housing data is having little impact on gold prices. June gold futures last traded at $1,811.70 an ounce, down 0.4% on the day.
Meanwhile, permits for future homebuilding fell roughly in line with expectations , dropping 3.2% to a rate of 1.819million units in March. Economists were expecting to see a rate of 1.83 million permits.
Annual construction permits are up 3.1%, compared to April 2021, the report said.
Economists have been expecting to see weakness in the housing market as the Federal Reserves starts to tighten its monetary policy, driving mortgage rates higher. Markets expect interest rate to rise to 3% by the end of the year.
Economists have been playing close attention to the housing market as it is a major contributor to economic growth and consumption.
“Despite an overhang of permits, we expect the pace of homebuilding to slow down further in coming months as higher mortgage rates continue to cool demand. However, undersupply in the pre-pandemic market means that housing starts should remain above pre-pandemic levels,” said Karyne Charbonneau, senior economist at CIBC.
