(Kitco News) -The gold market is struggling to attract new bullish momentum even as the U.S. housing market struggles to stabilize and weak construction activity continues to threaten economic growth.
Housing starts rose 5.7% in April to a seasonally adjusted annual rate of 1.36 million units, the Commerce Department said on Thursday. However, the data came in lower than expected, as economists looked for a rate of 1.42 million units.
Despite the monthly increase, the report said that housing construction compared to last year is down 0.6%.
The gold market is not seeing much reaction to the latest housing market data as investors take some profits after prices tested resistance just below $2,400 an ounce. June gold futures last traded at $2,387.70 an ounce, down 0.30% on the day.
A decline in building permits issued last month does not bode well for a sustained recovery in the housing market anytime soon. The report said that building permits for future homebuilding declined 3.0% to a rate of 1.44 million last month, compared to March’s revised estimate of 1.485 million permits.
According to consensus estimates, economists were looking for permits to remain relatively unchanged at around 1.48 million.
The housing sector has struggled in recent years as the Federal Reserve has aggressively raised interest rates. Potential home buyers have also faced higher prices due to low inventories.
Some economists have said that the pace of construction needs to improve for inventories to rise and prices to fall.
