Gold prices holding near session highs as U.S. pending home sales drops 2% in August, down 24% for the year

NEW YORK (Sept 28) The gold market continues to see solid technical buying momentum with economic data having little impact on the price action even as fewer U.S. consumers start the mortgage process to buy a home.

The National Association of Realtors (NAR) said on Wednesday its Pending Home Sales Index, based on signed contracts, dropped 2.0% to 88.4 last month. The drop was steeper than expected as economists were looking for a decline of 0.9%.

Pending home sales have declined in nine of the last 10 months. For the year the NAR said that the index is down more than 24%.

The gold market was seeing some technical buying momentum ahead of the report and is holding relatively close to session highs in initial reaction. December gold futures last traded at $1.660 an ounce, up 1.47% on the day.

The report said noted broad-based weakness in the housing sector with pending home sales declining in three out of the major regions nationwide.

NAR Chief Economist Lawrence Yun, said that rising mortgage rates, due to the Federal Reserve’s aggressive tightening cycle continues to weigh on the housing sector.

“The direction of mortgage rates – upward or downward – is the prime mover for home buying, and decade-high rates have deeply cut into contract signings," said NAR Chief Economist Lawrence Yun. "If mortgage rates moderate and the economy continues adding jobs, then home buying should also stabilize."

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