Architecture Billings at Highest Mark Since 2007, What Happened During Monday’s Gold Rout?

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Architecture billings hit an eight-year high this month and several large, Asian sell orders triggered the big gold sell-off on Monday.

ABI Strong in All Sectors

Paced by continued demand for projects such as new education and healthcare facilities, public safety and government buildings, the Architecture Billings Index (ABI) increased in June following fluctuations earlier this year. An economic indicator of construction activity, the ABI reflects an approximate nine-to-twelve month lead time between architecture billings and construction spending.

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The American Institute of Architects (AIA) reported the June ABI score was 55.7, up substantially from a mark of 51.9 in May. This score reflects an increase in design services (any score above 50 indicates an increase in billings).

This is the highest score for the ABI since 2007.

  • Regional averages: Midwest (57.2), South (54.9), West (50.7) Northeast (50.4)
  • Sector index breakdown: institutional (59.1), mixed practice (54.7), commercial / industrial (51.6) multi-family residential (47.0)
  • Design contracts index: 52.5

How Gold Dropped Below $1,100 an Ounce

In early Asian trading hours on Monday, when typically only tens of contracts of gold are traded, investors dumped more than $500 million worth of bullion in New York in four seconds, triggering the market’s biggest rout in years.

The sell-off began when one or more massive sell orders hit the price of gold on the CME Group‘s Comex futures index in New York a tenth of a second after 9:29 a.m. in Shanghai, triggering turnover of almost 5,000 lots of gold. That equates to 13 metric tons of gold, more than typically trades in hours this early in the day. The sales knocked the price almost $20 to $1,100 per ounce during those four seconds.

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