(Kitco News) - A significant drop in U.S. existing home sales, highlighting continued weakness in the housing market, has failed to provide new bullish momentum for gold, as the market continues to struggle amid weakening safe-haven demand.
New home sales fell nearly 14% last month, reaching a seasonally adjusted annualized rate of 623,000 homes, down from April’s revised rate of 722,000, according to a report released Wednesday by the U.S. Census Bureau and the Department of Housing and Urban Development.
Compared to May 2024, new home sales are down 6.3%, the report said.
The gold market showed little reaction to the disappointing housing data. Spot gold last traded at $3,321.64 an ounce, roughly unchanged on the day.
Analysts note that gold is struggling as tensions in the Middle East have eased following President Donald Trump’s call for a cease-fire between Israel and Iran. Waning safe-haven demand has pushed gold prices toward critical support just above $3,300 an ounce.
Although geopolitical uncertainty is currently offering limited support, some analysts believe that gold’s downside risk remains contained as the broader U.S. economy continues to weaken.
Economists point out that the ongoing weakness in the housing market does not bode well for overall economic activity. The sector remains under pressure as consumers face rising home prices and elevated mortgage rates.
According to the report, the median sales price of new houses sold in May 2025 was $426,600, while the average sales price stood at $522,200.
The median price rose 3.7% from April’s $411,400 and was up 3% from the previous year.
Economists have noted that home prices have climbed in recent years due to dwindling supply. However, that trend may be starting to shift: the number of new homes for sale at the end of May 2025 was 507,000—up 1.4% from April and 8.1% year-over-year.
