Housing Recovery Stalls, Consumer Prices Drop Sharply, Investors Sell Stocks For Metal Loss, And IMF Slashes Growth Forecasts All Around The World… Is There More Liquidation To Come? Will What Happened To Gold Happens To Stocks Next? Will Gold Prices Continue To Head Lower?
The IMF has reduced its world growth forecast for 2013 to 3.3% from 3.5%, according to the agency’s latest release.
Practically no one was safe.
Euro-area outlook was cut to -0.3% from +0.1%.
U.S. growth was slashed -0.2% to 1.9%.
China was cut to 8.0% from 8.1%.
Russia was cut to 3.4% from 3.7%.
Just a few days ago, Bitcoin was over $260.
German Economic Sentiment Misses Big And Dives In April- Germany’s ZEW economic sentiment plunged to 36.3 in April, more than expectations of a decline to 42. This is down from 48.5 the previous month. This is however the third highest level in the last 24 months.
The CPI release is out.
Consumer prices unexpectedly fell 0.2% in March from the previous month.
Economists were predicting a flat reading.
Excluding food and energy, prices were up 0.1% (economists were looking for a 0.2% advance).
Here’s the latest technical take from the folks at SocGen, who see gold going to $1265 (right now it’s at $1373, up about $50/oz from its overnight lows).
We’re not sure what all of the lines mean, but you may enjoy it nonetheless.
Economists have been cranking up their home price expectations. Some expect home prices to rise 8% in 2013. Housing pundit Ivy Zelman has said we’re in “nirvana” for housing.
But recently we’ve seen some signs that the recovery is slowing down.
First, building permits have declined since January. And though housing starts have come in strong, up 7% in March, this was driven by a 31% rise in multifamily starts. Single family starts were down 4.8%. Bank of America’s Michelle Meyer has previously pointed out that in this recovery multi-family rentals are creating a larger part of the housing stock.
Panic in the gold and silver pits of the Comex.
Gold and silver see the worst two day drop in 30 years.
“I think the last $20 has been margin selling. The market is falling like a knife. People are saying, Get me out now,” Phoenix Futures President Kevin Grady said. “You’re also seeing people selling energy profits to pay for metals losses. You’re seeing a tremendous amount of gold liquidation today.”
Heavy outflows on global gold exchange-traded funds, which cut holdings to their lowest in more than a year, could also mark the end of a love affair between gold and investors.
“The fall in gold prices is reminiscent of some of the market capitulations seen during the global financial crisis when leveraged investors were required to sell assets to maintain balance sheets and preserve liquidity,” said Ric Spooner chief market analyst at CMC Markets in Sydney.
The question is out there.
“I rather sense that today we’re all waiting for some new news while nervously wondering if there is more liquidation to come,” wrote Juckes in an email. “The majority of the mails I get wonder less about gold and commodities (the damage is done), and more about whether we will see a repeat in equities.”