Gold Struggling Despite US Pending Home Sales Data

The US housing market continues to lose momentum with fewer Americans starting the process of buying a new home, according to the latest data from the the National Association of Realtors (NAR).

Friday, the association said that its Pending Home Sales Index fell to a reading of 109.5 in January, down 5.7% from December. For the year the index is down 9.5%, the report said.

With inventory at an all-time low, buyers are still having a difficult time finding a home. Given the situation in the market – mortgages, home costs and inventory – it would not be surprising to see a retreat in housing demand,”

The disappointing economic data is not having much impact on the gold market as prices remains in significant selling pressure. April gold futures last traded at $1,888 per ounce, down nearly 2% on the day.

Gold price could hit $2,000 within a matter of days. According to some commodity analysts, the gold market is ignoring economic data and is seeing a sharp reversal as safe haven demand dries up. The US does look to be escalating the conflict with Russia after its invasion of Ukraine.

Economists pay close attention to the pending home sales numbers because the index is seen as a forward-looking barometer for the housing market. A lag of a month or two usually exists between a contract and a completed sale.