Gold prices are stable at a high level, showing no signs of decreasing

According to Kitco, world gold prices are trading near highs even though the latest data shows that the US housing market has improved in February 2025.

According to the announcement from the US Bureau of Population Research and the US Department of Housing and Urban Development, new home sales increased by 1.8% last month, far exceeding the forecast increase of 0.5%.

New home sales reached 676,000 units based on seasonal adjustments in February. These figures are in line with the forecast, as the market predicts sales will reach 680,000 units last month. January sales were also adjusted up to 664,000 units from 657,000 units.

Compared to the same period last year, new home sales increased by 5.1% compared to 643,000 units in February 2024.

Economists continue to closely monitor the US housing market, as this is an important factor for economic activity. The housing market has struggled after the US Federal Reserve (FED) increased interest rates the most in the past 40 years.

Along with high home loan interest rates, the shortage of supply has caused house prices to remain high, causing many potential new home buyers to not be able to participate in the market.

The precious metal is also receiving support as US consumer confidence continues to plummet, raising concerns that the country's economy may be in recession, according to Kitco.

According to the Conference Board (a US nonprofit research organization that provides reports and analysis on economic issues, work, labor markets and long-term trends) on Tuesday, the US consumer confidence index fell to 92.9, down from the revised level of 100 in February.

The data was weaker than expected, as economists had predicted a more modest decline, down to just 94.2.

In the short term, expert Colin Cieszynski from SIA Wealth Management said that gold prices continue to fluctuate around $3,000/ounce. The market is waiting for more signals from the US main tax list and political forums in the Middle East and Eastern Europe.

According to George Milling-Stanley - Chief Gold Strategist at State Street Global Advisors, he does not expect the current neutral stance of the FED to pose many threats to gold prices in the remainder of the year. The declining US interest rate will not support the greenback much.

According to Milling-Stanley, uncertainties surrounding potential tariffs on US President Donald Trump will be greater than the impact of the Fed's monetary policy on the USD. This is also a factor that causes cash flow to flow to gold.

In the medium term, gold is expected to surpass the newly established peak of 3,055 USD/ounce after investors returned to gold after a decline. However, this depends largely on the geopolitical situation in some regions and the strength of the USD.

Notably, Company Generale (SocGen - a large multinational bank headquartered in France) has just announced its multi-asset investment portfolio strategy for the second quarter. The bank still holds 7% of its portfolio in gold and predicts that gold prices could reach $4,000/ounce.

The banks analysts said geopolitical uncertainty continues to support gold as an important global currency. They also pointed out conditions that could push gold prices to $4,000/ounce.

As the geopolitical situation remains very uncertain, the decline in dependence on the US dollar could continue, meaning central banks around the world will continue to buy gold without interruption.

With the risk of a weaker US dollar leaning and central banks speeding up their dependence on the US dollar due to increased geopolitical uncertainty, we remain optimistic about gold," said analysts.