The precious metals market is at the end of its typical mid-July to last August “breather.” This is the time of the year when the eastern hempisphere physical buyers are somewhat dormant.
Over the last several years, China’s emergence as the world’s largest gold importer has somewhat reduced the late summer seasonal sell-off. But it’s the period of the year when it’s the easiest for the paper manipulators to push the price of gold lower.
Quite frankly, gold is up 25% since mid-December and 10% since early June. Notwithstanding the fact that, if left alone to trade freely, gold would go parabolic for at least $700-$1000, it’s been one of the best performing asset classes YTD and can use a “technical breather.” But India is starting to flex its muscle as it heads into its biggest seasonal gold buying period of the year from right around now to mid-December.
On the other hand, the housing market is getting ready to rollover. Its already crashing in some areas (Hampton, Aspen, Miami), as noted by Investment Research Dynamic’s Short Seller’s Journal two weeks ago.
The higher end of the price spectrum is loaded with inventory in most major MSAs and inventories in the middle and upper-middle price segments are building quickly.
July was negative month for existing home sales and mortgage applications. The only area homes were being “sold” was in the Government’s highly manipulated new home sales report.
The Shadow of Truth discusses gold and housing and the direction in which each is headed in its late episode: