(Kitco News) - The gold market continues to tread water above $2,000 an ounce but is unable to attract any new bullish momentum even as the U.S. housing sector remains weak.
New home sales increased 1.5% last month to a seasonally adjusted annual sales rate of 661,000 homes, down from December’s downwardly revised increase of 651,000, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development said on Monday.
The sales rate was slightly weaker than expected, as consensus forecasts looked for a sales rate of 681,000.
The gold market is largely ignoring further weakness in the U.S. housing sector. April gold futures last traded at $2,036.50 an ounce, down 0.63% on the day.
Although the U.S. new home sales came in weaker than expected, some economists note that there are signs the sector is bottoming. Last month’s sales figures are up 1.8% compared to January 2023.
While the housing market may be stabilizing, other economists note that the sector still faces some difficult challenges, as higher prices and persistently elevated interest rates are pricing many potential home buyers out of the market.
The report said the median sales price of new houses sold in January was $420,700; the average sales price was $534,300.
The lack of supply of new homes for sale is one factor keeping prices elevated. The report noted that, as of the end of January, there were 456,000 new homes for sale, representing an 8.3-month supply.
At the same time, rising mortgage rates are also creating a challenging environment for potential home buyers. The Federal Reserve has signaled that rates will be coming down this year; however, the timing of the new easing cycle remains a significant question in the marketplace.
