The Commerce Department reported that housing starts plummeted to a seasonally adjusted annual rate of 1.239 million units, falling short of the 1.350 million units expected by economists. This decline, coupled with a downward revision of June's figures to 1.415 million, underscores the volatility currently gripping the residential construction market. Conversely, building permits for future projects signaled potential resilience, climbing 5.0% to 1.443 million, a figure that comfortably surpassed the consensus estimate of 1.370 million.
Gold dips below $4,400 as U.S. housing starts stumble
Spot gold prices slipped to $4,394.24 per ounce following a stark 12.4% drop in U.S. housing starts for July. While the construction sector faced a deeper slump than anticipated, a concurrent rise in building permits provided a conflicting signal to investors navigating the current economic climate.
Gold had been trending near session lows prior to the 8:30 am ET release, ultimately settling into a 0.51% daily decline. The housing sector remains a critical component of the U.S. Gross Domestic Product, yet it continues to struggle under the weight of persistent inflation and elevated mortgage rates. These financial pressures, a direct consequence of the Federal Reserve’s aggressive tightening cycle, have effectively sidelined a significant portion of potential home buyers.
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