(Kitco News) - The gold market continues to lose its overnight gains, failing to maintain support at around $2,600 an ounce. According to some analysts, a stabilizing housing market could further pressure the precious metal.
Home sales rose by 4.8% last month to a seasonally adjusted annual rate of 4.15 million units, up from October’s rate of 3.6 million, the National Association of Realtors (NAR) reported on Thursday. The data exceeded expectations, as economists had forecast a rate of 4.09 million.
Additionally, sales increased by 6.1% compared to November 2023. The NAR noted that November recorded the strongest sales pace since March.
"Home sales momentum is building," said NAR Chief Economist Lawrence Yun. "More buyers have entered the market as the economy continues to add jobs, housing inventory grows compared to a year ago, and consumers adjust to a new normal of mortgage rates between 6% and 7%."
Gold prices are not reacting significantly to the latest economic data and remain in a broader downtrend early in the North American trading session. Spot gold prices last traded at $2,592.10 an ounce, up 0.33% on the day.
Despite growing optimism in the housing market, some analysts caution that the sector is not yet out of the woods, as elevated mortgage rates persist.
“U.S. 30-year mortgage rates are flirting with 7% again, and that's not a good sign for the housing market,” said Adam Button, Head of Currency Strategy at Forexlive.com.
Meanwhile, a low inventory of homes for sale is expected to keep prices high. The NAR reported that the total number of homes for sale at the end of November was 1.33 million units, down 2.9% from October but up 17.7% from last year. At the current sales pace, there is a 3.8-month supply of homes on the market.
The report also revealed that the median existing-home price for all housing types in November was $406,100, an increase of 4.7% from a year ago.
"Existing homeowners are capitalizing on the collective $15 trillion rise in housing equity over the past four years to seek homes better suited to their changing life circumstances," Yun added.
