Gold prices hold steady amid weakening US housing market

Gold prices are currently trading steady around $3,374.16 an ounce after the latest data showed the US housing market continued to weaken.

Housing starts fell a sharp 9.8% in May to a seasonally adjusted 1.256 million units, the lowest level since May 2020, when the COVID-19 pandemic began. The figure was much worse than analysts had expected, which had forecast a modest 0.8% decline. The previous month in April had been revised up to 2.7%.

For the year as a whole, housing starts fell 4.6 percent from the same period a year earlier. Additionally, building permits, an indicator of future construction activity, fell 2 percent, less than expected, another sign of the challenging real estate market.

Immediately after the data was released at the same time as the weekly unemployment claims, gold prices did not fluctuate much and remained stable around the $3,374.16/ounce mark, down only 0.44% on the day.

Comerica Bank chief economist Bill Adams said that in May, several key indicators of economic health, including retail sales, industrial production and housing, all fell short of private analysts’ forecasts, suggesting that economic activity may weaken this quarter, although GDP growth is likely to pick up as imports decline after a pre-tariff boost.

Mr. Adams said that the US Federal Reserve (Fed) is in a difficult position. On the one hand, economic growth and employment are showing signs of slowing down; on the other hand, business surveys show that the risk of inflation may return. Therefore, the Fed is likely to temporarily hold off and continue to monitor the situation, as Chairman Powell said in the previous meeting.

The US real estate sector plays a vital role in the economy, but is currently under considerable pressure due to high home prices and high mortgage rates, a result of the Fed’s prolonged tightening cycle, which has kept many new home buyers out of the market and slowed the overall economic recovery.

Source: https://baonghean.vn/gia-vang-giu-nguyen-giua-luc-thi-truong-nha-o-my-suy-yeu-10299922.html