U.S Housing Starts Fell by 4.1%

According to a recent report, privately owned Housing starts fell in by 4.1%; nevertheless, the annual rate for December 2011 was 24.9% above the December 2010.

As I have sited in the pasts, there is a supposed lagged (by one day) and negative relationbetween the development in housing starts and gold; i.e. as Housing starts annual rates falls, gold tends to increase the following day. If this relation will hold up then we should expect gold to rally today.

Forex / Gold & Silver– January

The Euro/USD rose again for the third straight day, yesterday by 0.82% to reach 1.2863; currently itseems that the debt auctions of France and Spain went well, as they have sold their bonds at a lower yields than anticipated. Therefore, if the Euro will further appreciate against the USD it may help rally gold and silver.

U.S. Treasuries / Gold & Silver– January

In recent months there seems to be positive linear correlations between the daily percent changes of U.S. 10 year notes yield and precious metals (during January, the linear correlations for 10 year note yields and gold and silver is 0.55 and 0.634, respectively). If the LT U.S. treasury yield will continue to rise, it may also indicate that gold and silver will tend to increase.

Gold and Silver Outlook

Gold and silver changed direction and slightly fell yesterday, but their general trend in January is still upward. The ongoing rally of the Euro against the USD will continue to affect commodities trading and may trade up gold and silver during the day. Finally, the upcoming U.S. existing home sales might affect the direction of gold and silver as I have presented in the past.

source form: dailyfx

Meanwhile, economist David Levy projected the U.S. will fall into a recession in 2012 or sooner despite upbeat economic data.

SPDR Gold Shares (GLD) fell 2.4% as it broke below key price support at its 10-week moving average. Market Vectors Gold Miners ETF (GDX) dropped 1.6% and Market Vectors Junior Gold Miners ETF (GDXJ) 4.9%.

 

IShares Silver Trust (SLV) skidded 1.9%. It closed in the upper end of its intraday range after falling as much as 5% in the morning.

IPath DJ-UBS Copper ETN (JJC) — a harbinger of industrial production levels — fell 2.9%.

Investors are taking profits from the rally off the October low and have been selling assets to cover margin calls and raise their cash positions, James DiGeorgia, editor of Gold & Energy Advisor, wrote in client note. “Cash is king.”

DiGeorgia believes once the sell-off bottoms, gold should be bought because central banks continue to buy gold. In addition, if there’s a sovereign debt default, it could lead to a global depression, he says. With massive amounts of debt, the U.S. and Europe will have to print money to pay it off.

Ed Carlson, founder Seattle Technical Advisors, expects gold to fall to $1,480 an ounce. That would translate to $148 a share for GLD or a 10% drop from Monday’s close. GLD fell below key price support at its 10-week moving average, marking a bearish development.

SPDR Dow Jones Industrial Average (DIA) fell 2.2% and SPDR S&P 500 (SPY) slid 1.9%.

IShares MSCI Emerging Markets Index (EEM) declined 3.2%; iShares MSCI EAFE Index (EFA), tracking foreign developed markets, fell 2.6%.

In an about-face to his previous outlook, Monty Guild — founder and CEO of Los Angeles-based Guild Investment Management — recommended selling U.S. and emerging market stocks.

Guild changed his bullish view after reading about a memo leaked to London’s Daily Telegraph that stated Germany proposes to create a German-controlled superstate to take over the beleaguered euro zone countries.

“That’s going to create a lot of uncertainty, and the markets don’t like uncertainty and that’s why it sold off today,” said Guild. “This will delay (Europe from) doing any quantitative easing and bailout of the banks.”

Although many news headlines blamed the sell-off on the supercommittee’s failure to come to an agreement over slashing the budget deficit after three months of talks, Guild said he thinks it didn’t have anything to do with the sell-off. “No one expects the supercommittee to do anything anyway,” he said.

Recession Imminent?

Despite some positive economic conditions such as solid retail sales, corporate spending and exports, the U.S. will likely enter a recession next year or even before, says Levy of the Levy Forecast.

“The main question is whether domestic fiscal policy will lessen or aggravate the recession,” Levy wrote. “Domestic profits plateaued in the first half and appear to have held up in the third quarter, but the outlook for the fourth quarter and for 2012 remains a pronounced downward trend.”

source from: investors

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1 To maximize your chances of successfully increasing your wealth, one has to invest in a number of areas including around 10-20% in precious metals say the experts. Since 2001 gold prices have risen more than 196% outperforming the Dow by 400%.

Who would not want to own a commodity that investors traditionally turn to in times of crisis? Gold has always been the haven to which investors turn when the markets go down.

2 Experts are now predicting that in these volatile markets the price of gold will reach $2000/oz. or higher. This makes gold an excellent investment for profit and protection in times of economic and market uncertainty

Stocks can lose their value, and companies can go under leaving you with worthless pieces of paper. Cash can lose its ability to increase in value due to the low interest rates. With bonds your money is tied up for the length of the term.

When property prices crash you can lose years of equity. Apart from gambling how many more ways can you lose your money?

Ok that’s the info on gold, but what about silver, how does that compare?

3 Silver has many qualities and properties that are extremely useful in the manufacturing industry. Silver is used in many industries such as electrical appliances, medical products, microcircuits, super-conductors and in 90% of solar cells.

With the predicted rise in the demand for newer, better, renewable energy systems the demand for solar panels is set to skyrocket. There’s an above ground supply of mined silver that is constantly dwindling year on year.

4 The price of silver tracks the gold price at around 1:70 although the ratio can vary. Traders, investors and buyers often analyze the gold/silver ratio. With the price of gold on the way up, silver will surely follow and so should you.

So what’s my next move? The smart thing to do would be to buy gold and silver. But what to buy?

5 You don’t have to buy bullion bars there is a better option. Buying collectable gold and silver mint condition coins is the best way to start. From just one single silver coin, to collections of gold coins, it depends on your budget and how much you like the person you are giving the gift to!

These coins have a numismatic value and are priced for their collectable value.

6 Coins have a face value as well as the value/oz. Because of this they are protected from the falling commodity price and will be traded as fine collectible coins. You also have the base metal value in the coin, which is set to rise. Gold and silver bars can only follow the base metal value whether it is up or down.

7 Coins are easily stored and presented. As the collections grow you can simply add this year’s new releases, making the giving of gifts a lot easier. You can start with the kids gift packs, that’s covered all those niece’s and nephews from an early age. How about starting at the very beginning, a dated, collectible, mint condition silver coin would make the ideal christening present.

Ok I now have the gold and silver but what if I no longer want to keep it?

There are a number of ways to sell your coins or bullion; you could sell the bullion to a recognized trader who will give you a lower price than you could buy it from them. One of the favorite ways is to sell on one of the Internets auction sites. People often get carried away with the bidding when it comes to buying the odd collectible mint condition coin or two, this also goes for selling your bullion.

source: ezinearticles.com