The real estate market in the US changed direction and showed a moderate contraction during July compared with June’s figures.
According to the recent U.S. Census Bureau report about the new residential construction statistics for July 2011:
The seasonally adjusted annual rate of building permits for privately owned housing reached in July 597,000 – a 3.2% decrease compared with June’s annual rate of 617,000. The July 2011 rate is still 3.8% above the rate in July 2010.
Privately owned Housing starts came short in July 2011 as the seasonally adjusted annual rate reached 604,000 compared with 613,000 in June 2011 – this is a 1.5% decrease; the annual rate in July is still 9.8% above the rate in July 2010.
This news doesn’t signal a good sign of economic recovery in the US in general and in the real estate market in particular.
According to Roache et. al (2008)* there is a lagged by one day negative correlation between Housing starts and gold price; i.e. as the Housing starts annual rate falls, gold price rises the following day; since gold price is currently traded up, this news will likely to give it a back wind force to continue pushing gold price’s up in the days to come.
*This correlation is based on the research done by Roache et. al (2008) in the paper named “the effects of economic news on commodity prices: is gold just another commodity?”
Current gold price, short term futures (September 2011 delivery) is traded at $1,783.0 per t oz. a $25 increase or 1.42%, as of 17:39*.
The current Dated Brent spot oil price declines by $0.50/b to $109.27 / barrel as of 17:55*.
Euros to USD is currently traded up at 1.4412 a 0.2295% decrease as of 17:48*.
(* GMT)
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