According to the recent U.S. Census Bureau report of the new residential construction statistics for August 2011 there was an increase in building permits, but there was a drop in housing starts.
The seasonally adjusted annual rate of building permits for privately owned housing reached in August 620,000 – a 3.2% increase compared with July’s annual rate of 601,000. The August 2011 rate is also 7.8% above the rate in August 2010.
On the other hand, privately owned housing starts came short in August 2011 as the seasonally adjusted annual rate reached 571,000 compared with 601,000 in July 2011 – this is a 5.0% decrease; the annual rate in August is still 5.8% below the rate in August 2010.
This news provide a mixed signal about he development of the US housing market; however the news of the decrease in housing starts might prove to have a strong effect on traders’ perspective than the building permits’ growth.
It was already studied that there is a supposed lagged by one day negative correlation between Housing starts and gold price; i.e. as Housing starts annual rates decreases, gold price tend to rise the following day; since gold price is currently traded up, this news will likely to give precious metals market a back wind force and keep pushing gold price’s up throughout the day.
Current gold price, short term futures (October 2011 delivery) is traded at $1,804.0 per t oz. a $25.1 increase as of 15:17*.
Euros to US dollar exchange rate is currently traded up at 1.3687 a 0.0062% increase as of 15:33*.
Current Nymex crude oil price, short term futures (October 2011 delivery) is traded up by 0.18% to $86.27 per barrel as of 15:05*.
(* GMT)
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