(Kitco News) - The gold market continues to hold initial support above $2,400 an ounce but is seeing little new momentum as the U.S. housing market continues to lose momentum.
Home sales dropped 5.4% last month to a seasonally adjusted annual rate of 3.89 million units, down from May’s rate of 4.11 million, the National Association of Realtors said on Tuesday. The data missed expectations as economists forecasted looked for a rate of 3.99 million.
Existing home sales are down 5.4% compared to May 2023.
The gold market is not seeing any major reaction to the disappointing economic data as prices hold their ground above a new key support level. August gold futures last traded at $2,405.30 an ounce, up 0.44% on the day.
The NAR said that higher prices are taking their toll on consumers as the median existing-home sales price increased to an all-time high of $426,900. This is the second consecutive month prices have hit an all-time high.
However, looking ahead, NAR Chief Economist Lawrence Yun said that there is a growing shift in the housing market to a buyers market from a sellers market.
“Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis,” said Yun. “Even as the median home price reached a new record high, further large accelerations are unlikely. Supply and demand dynamics are nearing a balanced market condition. The months supply of inventory reached its highest level in more than four years.”
Looking at the inventory of homes for sale, the NAR said that the supply of home for sale as of the end of June was 1.32 million units, up 3.1% in May and up 23.7% from last year.
“Unsold inventory sits at a 4.1-month supply at the current sales pace, up from 3.7 months in May and 3.1 months in June 2023. The last time unsold inventory posted a four-month supply was May 2020,” the report said.
