(Kitco News) - The gold market continues to trade sideways, showing little reaction to housing sector data that indicates an improvement in construction activity.
According to figures released Tuesday by the Commerce Department, housing starts rose 2.5% in July to a seasonally adjusted annual rate of 1.428 million units, up from June’s revised rate of 1.358 million.
Construction activity exceeded economists’ expectations, as consensus estimates had called for a decline to 1.29 million units.
Over the past 12 months, residential construction activity has increased 12.9%.
The report noted that single-family housing starts rose to a rate of 939,000 last month, an increase of 2.8% from June’s revised figure of 913,000.
The gold market is showing little response to the better-than-expected residential construction data. Spot gold last traded at $3,336.70 an ounce, up 0.17% on the day.
Although U.S. residential construction has outperformed expectations over the past two months, the data suggests activity could slow through year-end. The report showed building permits—a key indicator of future construction—fell 2.8% to 1.354 million, down from June’s revised level of 1.393 million. The decline was sharper than expected, as economists had anticipated a roughly unchanged reading.
Permits are down 5.7% compared to last year.
Markets remain closely focused on the housing sector, a crucial barometer of the broader economy. The sector has faced persistent headwinds in recent years as consumers contend with higher costs on two fronts: elevated interest rates from the Federal Reserve have driven mortgage rates upward, while limited housing supply has continued to push home prices higher.
