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(Kitco News) – The gold market is holding on to solid gains above critical resistance as the U.S. housing sector continues to struggle in the face of rising mortgage rates and higher prices.

New home sales dropped by 5.6% in October to a seasonally adjusted annualized rate of 679,000 homes, the U.S. Commerce Department said on Monday. At the same time, September sales numbers were revised significantly lower to 719,000.

The latest housing sales numbers missed expectations as consensus forecasts called for a sales rate of 724,000.

However, on an annual basis, new home sales are 17.7% above the October 2022 estimate.

The gold market has seen a solid start to the week, trading at a six-month high as prices benefit from a weaker U.S. dollar. The precious metal is not seeing much reaction to the disappointing sales numbers as it continues to hold above critical resistance levels. December gold futures last traded at $2,012,80 an ounce, up 0.49% on the day.

Looking at the precious metal’s technical outlook last week, analysts said that gold needs to break above the $ 2,010 level if it has a shot at pushing to new all-time highs.

Although the latest housing market data continues to disappoint, the weakness is not surprising, as the Federal Reserve’s aggressive monetary policy pushed mortgage rates to their highest level in 23 years last month.

Along with rising mortgage rates, new home buyers also face persistently higher new home prices. The report said the median sales price of new houses sold in October was $409,300. Meanwhile, the average sales price was $487,000.

However, prices could start to decline as inventories increase. The report said that at the end of October, there were 439,000 new homes for sale, representing a 7.8-month supply, up from a 6.9-month supply seen in September.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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