(Kitco News) - The gold market continues to follow broader market flows and is paying little attention to data showing that the U.S. housing market continues to stabilize.
New home sales increased by 3.6% last month, coming in at a seasonally adjusted annualized rate of 698,000 homes, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development said on Monday.
The sales data was stronger than expected, as economists had projected a rate of 669,000 units.
For the year, new home sales have increased by 6.7%, the report said.
The gold market is largely ignoring the positive economic data, as investors continue to react to the broad equity market selloff. Gold has been caught in a liquidity trap as investors “sell everything.” Spot gold last traded at $2,743 an ounce, down 1% on the day.
Looking at home prices, the median sales price of new houses sold last month was $427,000; at the same time, the average sales price was $513,600.
Along with elevated mortgage rates, a lack of supply has kept housing prices high, pricing many potential new home buyers out of the market. The inventory of new homes for sale was 494,000, representing an 8.5-month supply at the current sales rate.
Economists continue to pay close attention to the U.S. housing market, as it is a major contributor to economic activity. The housing sector has struggled after the Federal Reserve kept interest rates elevated through most of 2024, and now it appears to be shortening its easing cycle.
