Gold Prices Ignore Mixed U.S. Housing Construction Data
(Kitco News)- Thegold market is holding near session highs above critical resistance but ismostly ignoring mixed U.S. housing construction data.
TheCommerce Department's latest economic data showed that U.S. housing starts rose9.2% in to a seasonally adjusted annual rate of 1.1.282 million units in August,up from July's revised rate of 1.174 million. Consensus forecasts compiled bymost news organizations called for starts to be around 1.24 million.
For the year, housing construction is up more than 9%, compared to activity in 2017.
Meanwhile,the Commerce Department said the tally of building permits - important as anindicator of future construction activity - fell by 5.7% lastmonth to an annualized rate of 1.229 million, down from July'srevised rate of 1.303 million. Economists were expecting to see an increase to1.31 million permits.
For the year building permits are down 5.5% from August 2017.
Thegold market has not been reacting much to any economic data as it continue tofollow the U.S. dollar. The yellow metal is holding on to recent gains but isunchanged in initial reaction to the latest housing data; December gold futureslast traded at $1,209.60 an ounce up 0.57% on the day.
KatherineJudge, senior economist at CIBC World Markets said that the latest data couldindicator a peak in construction in the housing data, even if there is stillsome short-term momentum still in the pipeline.
“Housing starts have not displayed any upward momentum since thestart of the year, a sign that homebuilding either has peaked or is very closeto its peak, she said. “Overall, while housing market activity is poised tomoderate in the medium term as household formation slows andhigher interest rates start to erode affordability, demand in the nearterm should remain fairly solid, helped by rising wages.”
By Neils ChristensenFor Kitco News
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