US Housing Market data

Larger-than-expected gains in U.S. housing prices and consumer confidence on Tuesday gave credit to the possibility that the economy is emerging from the deep recession it is in.

The S&P/Case-Shiller house price index, which tracks property prices in 20 cities across the US, made its first quarter-on-quarter increase since the housing market started falling three years ago. The index rose by a seasonally-adjusted 1.4 per cent in the three months to June 30 compared to the first quarter.

The index was also up 1.4 in June compared to May, on top of a 0.5 per cent rise in May on April.

U.S. single-family home prices rose for the second month in a row in June, and consumer confidence jumped in August.

This caused a flurry of interest in US stocks which saw The Dow Jones industrial average advanced 30.01 points, or 0.32 per cent, to 9,539.29 while the S&P 500, a widely used measure of US shares, gained 2.43 points, or 0.24 percent, to 1,028.00.

The Effect on the Dollar

The dollar fell against most major counterparts as upbeat economic data from the US and Europe spurred demand for riskier currencies.

On Tuesday, the Obama administration added fuel to concerns about the dollar, saying the U.S. will run a cumulative budget deficit of $9 trillion over the next 10 years, $2 trillion more than it had previously projected.

The risks attached to the deficit the dollar now faces are huge, however there aren’t yet many signs that investors are leaving the dollar. China and Japan, the biggest foreign creditors to the U.S., loaded up on longer-term Treasury debt in June, according to the latest Treasury data. China, for example, bought $26.6 billion in notes and bonds, its biggest monthly buying on record.

Recommended article: As Budget Deficit Grows, So Do Doubts on Dollar – Wall Street Journal…

http://online.wsj.com/article/SB125122938682957967.html

See what effect this has had on gold

Important

Information in Gold Price Today is for general information only and is not intended to be relied upon by individual readers in making (or not making) specific investment decisions. Appropriate independent advice should be obtained before making any such decision.