Gold Price Sees Muted Reaction Following 5.5% Rise in Pending Home Sales

New York (Mar 29)  Gold prices remain under modest selling pressure the housing market saw a surge of U.S. consumers start the home buying process last month, according to the latest data from the National Association of Realtors (NAR).

Wednesday, the association said that its pending home sales index rose 5.5% in February to a reading of 112.3, compared to January’s level of 106.4. The increase was much larger than expected as consensus forecasts were calling for a rise of 2.3%. According to reports, this is the highest reading in 10 months.

Gold prices have been under pressure most of the session on technical selling as prices hit a one-month high Monday. While prices did fall following the report, the market reaction has been relatively muted. April Comex gold futures last traded at $1,252 an ounce, down 0.29% on the day.

The data is welcome news for the housing sector as existing home sales last month dropped 3.7%, according to numbers released by the NAR last week.

 "The stock market's continued rise and steady hiring in most markets is spurring significant interest in buying, as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year,” said Lawrence Yun, NAR chief economist. "Last month being the warmest February in decades also played a role in kick-starting prospective buyers' house hunt."

Economists closely watch the pending home sales numbers because the index is seen as a barometer for the housing market. A lag of a month or two usually exists between a contract and a completed sale.

Source: KitcoNews