Northwest Indiana Homes and Mortgages

Market News as the day begins - in general pressure for gold, commodities, and interest rates to go up on the horizon. In the short term some good opportunity to capitalize on 5% prime interest rates and buy a home now. Plus, the government will pay you a bonus for doing so.

RATES GOING UP? - There are now just 2 months remaining (i.e., February and March) in the Fed’s program to purchase $1.25 trillion of mortgage backed securities. The program, which originally began with Fed purchases in March 2009, will stop by the end of next month. Eric Rosengren, the President of the Federal Reserve Bank of Boston, predicted last month that mortgage interest rates will rise by as much as 0.75% when the purchase program ends (source: Federal Reserve).

Although Australia kept their rates steady, for now, there is intense pressure on all central banks globally to begin restricting interest rates ... translated raise rates.

What's up with gold? A steady increase, even accounting for corrections, in that each low is higher than the last one:

This is a distinct pattern of progressively higher lows.

Let me hasten to add that this analysis and discussion only applies to the short-term horizon -- the next couple of months. That's because contrarian analysis, to the extent it works, is only a short-term market timing tool; my econometric analysis of the HGNSI shows that it sheds little light on where the market will be in, say, one year's time, or even in six months.

So it may very well be that gold is headed to $5,000 per ounce, as some gold bugs currently are arguing.