Gold Prices Near Session Highs Following In-Line U.S. Housing Construction Data
(Kitco News)- Goldprices continue to push higher as U.S. housing data come in line withexpectations.
TheCommerce Department's latest economic data showed that U.S. housing starts rose1.5% in to a seasonally adjusted annual rate of 1.23 million units in October, upfrom September's revised rate of 1.21 million.Consensus forecasts compiled by most news organizations called for starts to bearound 1.23 million.
Annually, housing construction is down 2.9% compared the activity recorded in October 2017.
Meanwhile,the Commerce Department said the tally of building permits - important as anindicator of future construction activity - rose by 0.6% last month to anannualized rate of 1.63 million, down from September's revised rate of 1.27million. The data were also in line with expectations.
For the year, building permits are down 6% compared to last year.
Goldprices have been pushing higher as investors search for safe-haven assets asequity markets continue to fall due to growing concerns surrounding the globaleconomy. December gold futures last traded at $1,229 an ounce up 0.30% on theday.
Investors are watching the housing sector very closely as it has a major impact on U.S. gross domestic product. Some economists have said that the sector is under pressure as rising home prices and rising interest rates -- pushing mortgage rates higher -- are pricing many new home buyers out the of the market.
KatherineJudge, senior economist at CIBC World Markets, said that while they expect tosee weaker construction data, the bank does not expect to see a collapse in thesector.
“Theweaker trajectory seen for building permits lately suggests thathomebuilding likely doesn't have much further room to run,” she said. “However,rising wages should continue to support demand in the near term, with higherhome prices supporting homebuilding.”
By Neils ChristensenFor Kitco News
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