(Kitco News) -
The gold market continues to hold solid support above $2,600 an ounce as the U.S. housing sector struggles, even with the Federal Reserve embarking on a new easing cycle.
New home sales dropped 17.3% last month to a seasonally adjusted annual rate of 610,000 homes, below September’s revised rate of 738,000, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development announced Thursday.
The latest sales data significantly missed expectations, as consensus forecasts anticipated a rate of around 725,000 homes.
Annual sales, which strip out monthly volatility, continue to highlight significant weakness in the housing market, with sales down 9.4% from October 2023.
In response to the disappointing housing data, the U.S. gold market has retraced most of its overnight losses, with prices trading in roughly neutral territory. Spot gold last traded at $2,622.20 an ounce, down 0.08% on the day.
Some economists have noted that although the Federal Reserve has started to cut interest rates, mortgage rates remain elevated. Mortgage rates have stayed above 6% for the past two years, as 10-year bond yields remain high.
At the same time, elevated prices could be keeping new home buyers out of the market. The report stated that the median sales price of new houses sold in October 2024 was $437,300, while the average sales price was $545,800.
Looking at the inventory of new homes, the report estimated that 481,000 new houses were for sale at the end of October, representing a supply of 9.5 months at the current sales rate.
