The Commerce Department’s latest report reveals a bleak landscape for the residential sector, compounded by a downward revision of April’s data to 1.39 million units. This ongoing contraction represents an 8.9% drop in construction activity compared to the same period last year. The decline signals broader economic cooling, even as building permits for future projects remained relatively flat at 1.413 million units.
Gold Prices Rally as U.S. Housing Starts Plunge 15.4 Percent
A sharp 15.4% decline in U.S. housing starts to a 1.18 million-unit annual rate has unsettled markets, driving investors toward gold as a safe haven. With May construction activity significantly trailing the 1.43 million-unit forecast, the precious metal continues to gain momentum, trading near session highs at $4,349.40 per ounce.
Gold prices have climbed nearly 1% today, ignoring the typical volatility associated with such weak economic indicators. While housing permits show little sign of a robust recovery for the remainder of the year, the precious metal is benefiting from a steady bid. Investors appear to be prioritizing safety as inflationary pressures show signs of easing, keeping gold’s upward trajectory intact despite the stagnant housing outlook.
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