According to the recent U.S. Census Bureau report regarding the new residential construction statistics for December 2012, the annual rate of housing starts spiked while rate of building permits inched up. This report sends a positive signal as to the progress in the housing market.
Privately owned Housing starts spiked in December 2012: the seasonally adjusted annual rate settled at 954,000 compared with the revised rate of 851,000 in November 2012 – this change represents a 12.1% increase; moreover, the annual rate for December 2012 was also 36.9% above the December 2011 rate of 697,000.
From the housing starts point of view this is a very positive report.
Furthermore, in December the seasonally adjusted annual rate of building permits for privately owned housing reached 903,000 – a 0.3% increase compared with November’s annual rate of 900,000. The December 2012 rate was also 28.8% above the rate in December 2011.
This news provides a positive signal for the path in the U.S housing market as both the housing starts and building permits rose on a monthly scale and yearly scale. From my perspective, of the two, the housing starts are more important when examining the changes in the U.S housing market.
As I have pointed out in the past, there is a supposed lagged (by one day) and negative correlationbetween the monthly changes in housing starts and daily shifts in gold price; i.e. as Housing starts annual rate rise, gold price tends to decline the following day. Thus, all things being equal, the current rise in gold price might change direction tomorrow. Finally, this news may slightly appreciate the value of the U.S dollar against major currencies.
Current gold price (short term delivery) is traded at $1,686.9 per t oz. a $3.7 increase as of 15:51*.
Euros to US dollar exchange rate is currently traded up at 1.3354 a 0.49% increase as of 15:51*.
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