Existing Home Sales Plunge 8.4%, Gold Trades In Range

[Ben Graham]

While some parts of the country are seeing an early spring thaw, the U.S. housing market is still on ice.

U.S. existing home sales tumbled 8.4% to a seasonally adjusted annual rate of 3.91 million in January, the National Association of Realtors (NAR) announced Thursday. The news was far worse than expected and marked the biggest monthly decline in nearly four years.

High home prices, falling consumer confidence and a shrinking housing inventory are all factors pressuring the housing market. “The decrease in sales is disappointing,” said NAR Chief Economist Dr. Lawrence Yun.

Why The Housing Report Matters

If the weakness in the housing market continues, it could have a major impact on investor psychology and broader financial markets.

Real estate and the housing market play a major role in the U.S. economy, estimated at 15-18% of total gross domestic product (GDP).

From construction jobs for new housing to home renovations to new consumer expenditures when people buy a home, there is a huge ripple affect on the economy from the housing market. New homeowners typically buy a slew of goods and services like new furniture, appliances and lawn care services when they buy a home, all adding to GDP growth.

A slowdown in the housing market has the opposite impact on the broader economy. The coming months will be key for the housing market as the spring is typically the most active time of the year for home sales.

Gold Reacts as Stocks Sell Off

Gold traded mostly steady as the housing news broke, but slipped slightly lower later in the day. Wall Street analysts attributed the modest dip in gold more likely to the sharp sell-off in stocks. Some traders had to exit positions in commodities like gold to raise liquidity in the face of margin calls on losing stock positions.

Recent Action in Gold Has Turned Sideways

Since the start of February, gold has stabilized and traded quietly in an orderly range between roughly $5,090 and $4,897.

Buyers quickly entered the precious metals market on a late January dip in gold toward $4,544 and the yellow metal quickly rebounded to the $5,000 area.

Stocks are selling off on fresh concerns over whether the massive investments in artificial intelligence will turn into big profits for companies in the months ahead. The abrupt and sharp sell-off in stocks forced some traders to raise cash by selling gold to exit their losing equity positions.

The long-term uptrend in gold remains intact. A period of consolidation is healthy for the gold market following the strong gains throughout 2025 and 2026.

Big Picture for Gold Remains Positive

Analysts including Goldman Sachs Group and Deutsche Bank AG remain broadly positive on the outlook for gold this year. BNP Paribas recently predicted gold may climb to $6,000 an ounce by the end of the year as macroeconomic and geopolitical risks remain.

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