Gold Stops on Housing Starts: Morning Market Update May 16 - Gainesville Coins News
No Minimum order! We accept Pay with Credit Card
Call Us: (813) 482-9300 Mon-Fri 9:00AM-6:00PM EST
Login or Register
Log into your account
About Gainesville Coins ®
Billions Of Dollars Bought And Sold A+ BBB Rating 10+ Years No Hidden Fees Or Commissions All Inventory Ships Directly From Our Vault

Gold Stops on Housing Starts: Morning Market Update May 16

blog | Published On by
Gold Stops on Housing Starts: Morning Market Update May 16

Housing starts in the U.S. posted a surprise increase this morning, but the gains were in multi-family housing instead of single family homes. Gold dipped briefly on the news, the dollar saw some momentary support against a strong yen, and the stock markets just shrugged.

Silver eased overnight, and is down 1% this morning around the $19.35 mark. Platinum is flat, and palladium is holding on to a $5 jump it got on the COMEX open.

Buzz is increasing about the large amount of money flowing into U.S. Treasuries yesterday The yields on the long bonds (10-year and 30-year) have taken a dive as the demand pushes prices higher. The yield on the 10-year note dropped under 2.50% yesterday, despite signs this week that inflation spiked from last month.

confused

In an environment where the stock market is supposed to be the only game in town, big players are quietly moving into U.S. bonds. Various theories have been put forward for the reason, from large funds moving out of an erratic stock market, to investors dumping European bonds (especially those from distressed nations like Greece) in preparation for quantitative easing by the ECB, to weakness in both the EU and Chinese economies.

The yen is at a three-month high against the euro and a two-month high against the dollar, as both Western currencies weaken and safe haven demand in Asia grows. Reports out of China are that the number of bad loans is now at a nine-year high.

Perhaps the most interesting development for gold today is Narendra Modi's alliance winning a landslide victory in India, riding a wave of public anger over a faltering economy and widespread corruption in the ruling Congress Party. Rahul Ghandi, whose family has controlled India since the nation's independence from Great Britain in 1947, conceded defeat last night, in the worst election result for his party in its history.

elephant-1612391_640

Modi, leader of the Hindu nationalist BJP party, campaigned on a pro-business and anti-corruption platform. One of his promises was to ease some of the unrelenting restrictions on the import of gold, including a 10% import tax. The previous government clamped down on gold to fight a crippling trade deficit, but the money still flowed out of the country in the black market.

Any relief to the jewelry sector will likely have to wait until Modi forms his new government. Until last year, India was the world's largest importer of gold, where it has served religious and financial purposes for many hundreds of years.

 

 

by Steven Cochran

Gainesville Coins Portfolio Tracker and Financial News

This site uses cookies for analytics and to deliver personalized content. By continuing to browse our site, you agree that you have read and understand our Privacy Policy.