Monday, May 16, 2011

Home Builders' Index Shows No Change In Confidence Level

The National Association of Home Builders' Housing Market Index for May was unchanged at a low level of 16: roughly, it means that 16% of home builders see conditions as good. The index was expected to rise to 17 for this month. Evidently, new housing is still in the doldrums: the employment situation and lack of access to credit were blamed.

The gold market got a bit of a boost when this index number was disseminated, although the 10 AM release time was in the middle of an upward run already in place. Contrary to my own expectation, gold double-bottomed below $1,494 around 9:00 and ran up to around $1,500 by the time this item was released. Afterwards, gold climbed further to $1,504 before getting stuck again. That rally was contemporaneous with a plunge in the greenback, which didn't seem much affected by the news.

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