This morning, as I was reading my daily dose of world, technology, political, science, economic, and market news, my mind jumped back to the analysts and pundits who, in early 2010, were predicting that by the end of the year, gold would top $2,000.  Now that triggered another memory of one pundit/analyst who predicted gold would be at $5,000 by the end of 2012. 

So, the first pundit/analyst missed the mark by some $660, and it remains to be seen how accurate the second analyst/pundit will be, but suffice it to say that gold is in retreat as I write this, and it has been since the beginning of the year.  As I wrote recently, gold will retreat further in 2011 as the global economy improves.

I also wrote recently that the housing market would begin a slow recovery this year.  No less than Karl Case is speaking to the same possibility.        

The housing market may start crawling up from rock bottom this year.  Even if it does, though, any rebound is likely to be anemic.  “There’s a good chance of a housing turnaround this year, but it’s not going to be enough to give much help to the economy,” says Karl Case, the co-creator of the S&P/Case-Shiller indexes that track U.S. home prices.  “We’re coming off 50-year lows, and we still have to deal with the foreclosure mess.”

The truth is that the housing market does not need to go “gangbusters” in order for it to help the economic recovery.  All the housing market needs to do is stabilize and begin to report good news rather than bad in order to help the economy.  Remember the important role of perception in both our economy and markets.  If the American consumer perceives recovery, it will happen.

HELSINKI/LONDON (Reuters) – Shares in semiconductor companies jumped on Friday in Europe and Japan after strong earnings report from sector bellwether Intel, the world’s largest chipmaker, defied a slowdown in PC sales.

I also wrote recently that the semiconductor sector is one to watch in 2011.  I get it that one earnings report from one company (although the one company is, well, Intel) does not a rally make, but the stellar report is a good omen for the coming year.  Keep in mind, the focus of the chip market has shifted from PC sales to mobile device sales, or hand-held computers, if you will.  Smaller and more innovative companies (ARM Holdings) are now providing smaller and faster chips for the mobile market and the behemoth Intel will have to change to keep pace.  My guess is that Intel will slowly morph into a contender again; its focus just might be less on chips and more on other key areas of an expanding Internet.  Look at its purchase of MacAfee as its invite into the Internet security arena, another potential growth area in 2011.

Another good day in the market makes me smile …

Trade in the day; invest in your life …

Trader Ed