Gold slipped toward $4,000 an ounce on Thursday, unable to draw a safe-haven bid even as U.S. pending home sales fell far short of forecasts. Analysts say the metal is fixed on the prospect of more rate hikes, with resilient consumer data and firmer yields capping any rebound.
Gold could not turn a weak U.S. housing report into gains on Thursday, trading at $3,992.80 an ounce, down 1.6% on the day. The metal continues to struggle to hold critical support at $4,000, and it failed to attract a safe-haven bid as the housing sector stayed lackluster.
Housing data misses but gold stays soft
The U.S. Pending Home Sales Index dropped 5.4% in June, the National Association of Realtors said Thursday, far weaker than the 0.5% decline economists had forecast. Over the past 12 months, the index is down 0.3%. According to the NAR, fewer potential buyers than expected are starting the homebuying process.
NAR Chief Economist Dr. Lawrence Yun tied the weakness to the highest mortgage rates in nearly a year and the record-high national median home price, which he said are weighing on a tepid housing market especially hard for first-time buyers. He added that job gains can help support housing demand.
Yields and the dollar cap the metal
Gold has been unable to attract buying momentum despite the disappointing data. Analysts say the metal remains focused on the prospect of additional interest rate hikes, as the broader economy and U.S. consumers show relative resilience.
That resilience showed up elsewhere. Retail sales edged up 0.2% in June, matching forecasts, while initial jobless claims dropped by 8,000 to 208,000, the lowest in ten weeks. The 10-year Treasury yield climbed back to around 4.57%, and the dollar index inched higher to roughly 100.54, both headwinds for bullion.
Softer inflation offered some support without reversing the move. According to IndexBox, June’s headline CPI contracted by 0.4% and final-demand PPI fell 0.3%, yet markets still price a near-90% probability of the Fed holding rates steady at the July 29 meeting.
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