U.S Housing Starts Sharply increased by 9.3% in November

According to this month’s U.S. Census Bureau report of the new residential construction statistics for November 2011 there was a sharp gain in building permits and housing starts.

Privately owned Housing starts sharply increased in November 2011 as the seasonally adjusted annual rate reached 685,000 compared with 627,000 in October 2011 – this is a 9.3% increase; furthermore, the annual rate for November 2011 was 24.3% above the rate in November 2010 of 551,000.

The seasonally adjusted annual rate of building permits for privately owned housing reached in November 681,000 – a 5.7% increase compared with October’s annual rate of 644,000. The November 2011 rate was also 20.7% above the rate in November 2010.

This news provides a clear positive signal about the progress of the U.S real estate market.

As I have sited in the past, there is a supposed relation, which is lagged by one day and negative, between housing starts and gold price; i.e. as Housing starts annual rates increases, gold price tend to decline the following day. That being said, the sharp gain the housing starts may be among the current factors to rally indexes and prices such as S&P500 index, crude oil prices and Euro/USD. Since gold and silver prices are strongly correlated to these abovementioned indexes in recent months, the news of the housing starts may indirectly pressure gold and silver prices to further rise.

Current gold price, short term futures (January 2012 delivery) is traded at $1,616 per t oz. a $20.2 increase as of 15:46*.

Euros to US dollar exchange rate is currently traded up at 1.3114 a 0.8859% increase as of 16:05*.

Current Nymex crude oil price, short term futures (January 2012 delivery) is traded sharply up by 3.56% to $97.22 per barrel as of 16:00*.

(* GMT)

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