(Kitco News) - Gold prices continued to tread water after the U.S. housing sector disappointed to the downside last month, with fewer consumers than expected beginning the process of buying.
U.S. pending home sales came in flat at 0% for an index reading of 71.6 in November, following October’s revised decrease of 1.2%, the National Association of Realtors (NAR) said Thursday. The data was worse than expected, as the consensus forecast called for a 1% increase in pending home sales transactions. October’s initial reading of 71.4 was the lowest since records began in 2001.
The report noted that the index was down 5.2% compared to November 2022. The Pending Home Sales Index (PHSI) is a forward-looking indicator of home sales based on contract signings. An index of 100 is equal to the level of contract activity in 2001.
The gold market remains range bound and continues to trade nearly flat on the session on Thursday. Spot gold last traded at $2,078.44 an ounce, up 0.06% on the session.
“Although declining mortgage rates did not induce more homebuyers to submit formal contracts in November, it has sparked a surge in interest, as evidenced by a higher number of lockbox openings,” said Lawrence Yun, NAR chief economist.
The U.S. housing sector, which is a major contributor to the nation’s gross domestic product, has been a drag on growth through 2023 as the Federal Reserve has aggressively raised interest rates.
“With mortgage rates falling further in December – leading to savings of around $300 per month from the recent cyclical peak in rates – home sales will improve in 2024," Yun added.
