(Kitco News) – Gold prices are off their lows but remain down on the day following further weakness in the housing sector as fewer consumers bought new homes last month.
Wednesday, the U.S. Commerce Department said that new home sales dropped 5.5% in September, to a seasonally adjusted annualized rate of 553,000 homes, down from August’s downward revised rate of 585,000. According to consensus forecasts, economists were expecting to see a modest drop to 627,000 units.
New home sales are at their lowest level in nearly two years.
The gold market has seen a modest boost following the weak housing data, but reaction has been muted as traders appear to be taking some profits after the yellow metal hit a three-month high Tuesday. December gold futures last traded at $1,1235 an ounce, down 0.15% on the day.
Many economists have been showing more concern over the health of the housing sector. The new home sales data comes after last week’s disappointing existing home sales, which declined for the sixth straight month.
Many economists have noted that the housing sector is suffering as mortgage rates rise because of increasing interest rates.
“The housing market seems to falling off a cliff as a result of sluggish wage growth, higher rates, affordability,” said Greg Michalowski, currency strategist at Forexlive.com
By Neils Christensen
For Kitco News