Limited Gold Movement As Markets Eye U.S. Housing, Other Data

 | Sep 24, 2014 05:28AM ET

Gold is showing little movement on Wednesday, as the spot price stands at $1223.62 per ounce in the European session. The metal showed some upward movement on Tuesday, touching a high of $1234 before retracting. Investors are on the sidelines, waiting for some key US numbers to help gauge the direction of the economy. The US releases New Housing Sales later in the day and durable goods data on Thursday.

US Existing Home Sales didn’t impress in August, slipping to 5.05 million, compared to 5.15 million in the previous release. This was way off the estimate of 5.21 million. The indicator had exceeded the estimate in the past three releases, so the weak numbers disappointed the markets. The markets are hoping for better news from New Home Sales, which will be released later on Wednesday. The indicator has been struggling lately, with the past two readings missing expectations. The markets are expecting a stronger reading for August, with an estimate of 432 thousand.

The US economy may be much more robust than that of the Eurozone, but it is also grappling with weak inflation levels, as underscored by August releases. CPI, the primary gauge of consumer inflation, came in at -0.2%, its first decline since October. Core CPI followed suit with a flat reading of 0.0%. This was the first time the index failed to post a gain since October 2010. The weak numbers follow disappointing manufacturing inflation data. PPI, a key event, dipped to just 0.0%, a 3-month low. Core PPI also softened in August. Low inflation levels could delay the Federal Reserve’s plan to raise interest rates, which is widely expected to take place in the first half of 2015.