(Kitco News) — Spot gold prices have steadied firmly near session highs, holding solidly above $4,300 per ounce and notching a 2.7% daily gain to settle at $4,374.60 an ounce, as lingering fragility in the U.S. housing sector continues to underpin the precious metal’s safe-haven appeal. The latest pending home sales data presents a mixed economic picture, fueling market uncertainty and supporting sustained upside momentum for gold.
According to the latest release from the National Association of Realtors (NAR), the U.S. Pending Home Sales Index edged up 0.3% in August, outperforming market consensus estimates of a 0.2% decline. However, the marginal monthly improvement fails to reverse the sector’s overall downturn. July’s pending home sales data was revised downward from a 2.3% drop to a 2.6% decline, and the index tumbled 4.7% year-over-year, reflecting persistent weakness in the U.S. real estate market.
The sluggish housing market stems from the Federal Reserve’s continued monetary policy tightening. On Wednesday, the Fed implemented a 25-basis-point interest rate hike, with Fed officials signaling that further tightening is still necessary to push inflation down to the 2% target level. Sustained high mortgage rates have offset positive drivers including steady job growth and rising household income, effectively curbing homebuying willingness.
NAR Chief Economist Dr. Lawrence Yun noted that while some homebuyers continued to sign purchase contracts in August despite higher mortgage rates, the housing market remains lackluster overall, with contract signing volumes still far below last year’s levels. Notably, current pending home sales activity is approximately 30% lower than pre-2020 pandemic levels. The sector peaked in 2021 when mortgage rates hit a historic low of nearly 3%, and transaction activity has never returned to that peak level since then.
As a key leading indicator of existing home sales, the weak trend of U.S. pending home sales signals muted overall economic activity, injecting sustained uncertainty into the market. Though gold saw no sharp short-term fluctuation in response to the mixed housing data, the fragile U.S. economic outlook continues to drive safe-haven capital inflows, supporting gold prices to maintain a strong upward trend.
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