According to the recent U.S. Census Bureau report of the new residential construction statistics for September 2011 there was a sharp increase in housing starts but a drop in building permits.
Privately owned Housing starts sharply inclined in September 2011 as the seasonally adjusted annual rate reached 658,000 compared with 572,000 in August 2011 – this is a 15.0% increase; the annual rate in September was also 10.2% above the rate in September 2010.
On the other hand the seasonally adjusted annual rate of building permits for privately owned housing reached in September 594,000 – a 5.0% decrease compared with August’s annual rate of 625,000. The September 2011 rate was 5.7% above the rate in September 2010.
This news provide a mixed signal about the development of the U.S housing market; however the news of the increase in housing starts might prove to have a strong effect on traders’ perspective than the building permits’ contraction.
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 increases, gold price tend to fall the following day; since gold price is currently traded down, this news might continue to adversely affect the precious metals market and keep pulling gold price’s down throughout the day.
Current gold price, short term futures (November 2011 delivery) is traded at $1,644 per t oz. an $8.8 decrease as of 17:10*.
Euros to US dollar exchange rate is currently traded up at 1.3783 a 0.2228% increase as of 17:19*.
Current Nymex crude oil price, short term futures (November 2011 delivery) is traded down by 0.55% to $87.85 per barrel as of 17:13*.
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