Gold snapped its four-day skid on Tuesday to rally above the key $2,400 per ounce level as investors awaited economic reports later in the week that could provide a catalyst for the yellow metal.
Helped along by a slump in 10-year Treasury yields and continued optimism of interest rate cuts, gold hit $2,404 per ounce in midday trading, gaining $8.66. The commodity also got a boost from a report Tuesday by the National Association of Realtors, which found that home prices hit record highs last month, causing existing home sales to decline 5.4% to a seasonally adjusted annual rate of 3.89 million units. The figure was below Wall Street projections of 3.95 million units.
Additionally, the median existing-home sales price increased 4.1% from June 2023 to $426,900 – the second straight month it reached an all-time high and the 12th consecutive month of year-over-year price gains, according to the NAR data. Mortgage rates at 7% also scared off some homebuyers, the industry group reported.
Meanwhile, silver was barely trading in positive territory, up $0.02 at $29.09 per ounce.
While the market searches for additional clarity in the upcoming U.S. presidential election – which was upended on Sunday with President Joe Biden dropping his bid for a second term at the top of the Democratic ticket – bullion investors continued to expect, the Fed to begin cutting interest rates. Even with the string of political and economic uncertainties in the past several days, the market still pegged the likelihood of a September cut at more than 96% as of Tuesday afternoon, per the CME FedWatch tool.
Buoyed by that optimism, traders were looking ahead to a string of economic reports expected this week, including Wednesday’s advanced retail and wholesale inventories data, second-quarter GDP on Thursday, and Friday’s all-important core personal consumption expenditures price index – the Fed’s preferred method of measuring inflation.
Monetary policymakers are set to meet July 30-31.
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