Gold Prices Weaker Following Mixed New Home Sales Data

New York (Oct 26)  Mixed U.S. economic data from the housing sector, is unable to prop gold up as prices fall into negative territory.

Wednesday, the U.S. Commerce Department said that sales of new homes in September rose 3.1% to a seasonally adjusted rate of 593,000 units, up from August’s revised sales rate of 575,000 homes. However, the sector is not as strong as the headline would suggest as August’s initial report pegged the rate at 609,000 homes.

The data was also slightly worse than expected as economists were forecasts a sales rate of under 601,000.

Gold prices were relatively unchanged on the day, managing to shake off stronger-than-expected preliminary U.S. manufacturing data; however report has pushed gold to session lows, last trading at $1,270.30, down 0.26% on the day.

Gold prices have now fallen below the 200-day moving average, which comes in at $1,272.40 an ounce.

Royce Mendes, senior economist at CIBC World Markets, dismissed the weaker than expected housing data, saying that the sector is still expanding. The report noted that September’s sales rate was almost 30% higher compared to last year.

“While this number came as a disappointment, the overall momentum in both new and existing home sales continues to suggest healthy growth,” he said.

Gold prices hitting new session lows despite disappointing U.S New Home Sales. December gold last traded at $1,269.60 an ounce, down 0.31% on the day. Gold prices are now below the 200-day moving average which came in at $1,272.40 an ounce.
The report noted a rise in new home prices. Last month the median sales price was $313,500, up compared to August price of $284,000; at the same time the average prices in September was $377,700, up compared to the previous month’s average price of $353,600. The inventory of new homes for sale was 235,000 as of the end of September, presenting at 4.8-month supply at the current sales pace.

Source: KitcoNews