(Kitco News) - The gold market is pushing to session highs and is close to testing resistance at the important psychological level of $1,650 as U.S. existing home sales fall to their lowest level in 10 years, in line with expectations.
Existing home sales fell 1.5% last month to a seasonally adjusted and annualized rate of 4.71 million units, compared to August's annualized rate of 4.78 million homes, the National Association of Realtors (NAR) said on Thursday. The market consensus called for existing home sales to decline to 4.69 million.
The drop in U.S. home sales has come as little surprise to many economists. The Federal Reserve's tightening cycle has driven mortgage rates to their highest level in 10 years.
"The housing sector continues to undergo an adjustment due to the continuous rise in interest rates, which eclipsed 6% for 30-year fixed mortgages in September and are now approaching 7%," said NAR Chief Economist Lawrence Yun.
For the year, sales of existing homes are down 23.8%, the report said.
The gold market is seeing some bullish interest following the latest housing market data; however, $1,650 is proving to be an interesting resistance point. December gold futures last traded at $1,646.70 an ounce, up 0.76% on the day.
Along with rising mortgage rates, home buyers are also being pushed out of the market as low inventories continue to support elevated home prices. The report said the median price for all housing types in September was $384,800, up 8.4% compared to last year.
"This marks 127 consecutive months of year-over-year increases, the longest-running streak on record," the report said.
The supply of homes for sale, was 1.25 million units as of the end of September, representing a 3.2-month supply and unchanged from August.
"Despite weaker sales, multiple offers are still occurring with more than a quarter of homes selling above list price due to limited inventory," Yun added. "The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today."
