According to this month’s U.S. Census Bureau report of the new residential construction statistics for October 2011 there was a sharp increase in building permits but a very moderate slip in housing starts.
Privately owned Housing starts slightly declined in October 2011 as the seasonally adjusted annual rate reached 628,000 compared with 630,000 in September 2011 – this is a 0.3% decrease; that being said, the annual rate for October 2011 was 16.5% above the rate in October 2010 of 539,000.
On the other hand the seasonally adjusted annual rate of building permits for privately owned housing reached in October 653,000 – a 10.9% increase compared with September’s annual rate of 589,000. The October 2011 rate was also 17.7% above the rate in October 2010.
This news provide a mixed signal about the progress of the U.S real estate market; however the news of the no increase in housing starts might prove to have a stronger effect on traders’ perspective than the building permits’ growth.
As I have sited in the past, 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 down, this news might curb some of the falls of gold price, even though the change in the housing starts was very small so it might eventually have little to no effect on the financial markets.
Current gold price, short term futures (December 2011 delivery) is traded at $1,743 per t oz. a $31.2 decrease as of 15:40*.
Euros to US dollar exchange rate is currently traded up at 1.3519 a 0.4139% increase as of 15:55*.
Current Nymex crude oil price, short term futures (December 2011 delivery) is traded down by 1.41% to $101.14 per barrel as of 15:44*.
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