Gold remains under pressure as U.S. housing starts rise 19% in June

NEW YORK (June 17) Gold prices remain trapped below $4,000 an ounce and have been unable to attract any significant safe-haven demand despite persistent uncertainty in the U.S. housing sector, which threatens to weigh on economic activity through the second half of the year. Although construction activity recovered in June after falling to a six-year low in May, the sector continues to struggle. Housing starts jumped 19% last month to a seasonally adjusted annual rate of 1.47 million units, up from May’s revised annual rate of 1.20 million units, the Commerce Department announced on Friday. The data was significantly better than expected, as economists had forecast a more modest recovery to 1.31 million units. Meanwhile, housing starts are up 3.5% compared to the same period last year, the report said. Although construction activity has recovered from May’s sharp decline, permit data—a leading indicator—suggests a limited recovery later this year. The report said that building permits for future homebuilding fell 3% to 1.37 million units last month, which was weaker than expected. According to consensus estimates, economists had forecast permit issuance to remain relatively stable. The number of building permits issued has fallen 2.4% compared to the same period last year. The gold market is seeing little reaction to the latest economic data as selling pressure continues after prices failed to hold support at $4,000 on Thursday. Spot gold last traded at $3,966.60 an ounce, down 0.22% on the day.

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