Gold Price up After Weak Housing Report
Gold was trading softer in the morning while investors were waiting for the housing reports to come out. When the reports finally came out weaker then expected, gold prices immediately climbed and are gaining back what they lost in early morning trading.
Update 4:32 pm EST
The report showed that the housing market is still struggling. The Dow Jones Industrial Average (down 60 points) was down as a consequence, as well as the Nasdaq (down 18 points) and the S&P 500 index (down 6.4 points). While stocks are trading lower, gold continues to trade higher. Whether the gold prices will be up above yesterday’s prices is not certain yet.
The housing report showed that the US home prices rose 0.4% on a seasonally adjusted basis from July to August. The 0.5% decline reported in July was revised to a drop of 0.7%, which added some concern over the housing market. The housing market was already negatively affected by the recent foreclosures scandal (via marketwatch.com).
U.S. house prices rose 0.4% on a seasonally adjusted basis from July to August, the Federal Housing Finance Agency reported Tuesday. The 0.5% decline reported in July was revised to a drop of 0.7%.
Investors Business Daily comments on the issue:
“Existing-home sales rose 10% in September to 4.53 million, following the worst summer for the housing market in more than a decade. Lawsuits over flawed foreclosure documents could keep buyers on the sidelines late this year, say industry insiders.”
Based on this information, gold will continue to stay at current levels or climb up higher. Uncertainty concerning the future tends to send investors to gold and gold coins.