Gold Fizzles on U.S. Housing Data
Source: Commodity Online, Geena Paul (7/27/10)
"The U.S. housing sector posted a 24% growth in June."
The most-actively traded gold contract, for December delivery, fell $4.60, or 0.4%, to settle at $1,187 an ounce on the Comex division of the New York Mercantile Exchange.
In addition to gold, prices for U.S. Treasuries, also perceived as a safe-haven investment, were down following government data showing new home sales increased 23.6% in June to an annual rate of 330,000, beating economist expectations of a 3.7% gain to 311,000.
The data has helped equity markets across the globe jump. From India to Europe, markets rebounded following the news about U.S. housing growth.
However, there are still too many homes on the market to suggest price stabilization. At current rates of sale, inventory of new and existing homes listed for sale stands at almost nine months.
The latest figures helped shore up confidence about the U.S. housing market after a raft of data pointed to renewed weakness—the property market was one of the main reasons behind the global recession and the financial crisis.
And this has helped the markets show some rise. But the yellow metal will witness a fall in safe haven sales in the coming days.