The Capacity Utilization rate in the US for total industry (January 2012) was released today at 78.5%, which is unchanged from the previous release in December 2011 at 78.6%. This means that we're coming to the end of an uptrend in capacity utilization rates. Going forward it is very important to monitor this trend and see whether we have reached a top or continue to go up in capacity utilization rates.
If capacity utilization rates were to go back down, this means the industry has an oversupply because of a drop in demand for goods. It will have to cut production, lay off workers to increase efficiency in its production. This is deflationary, and would mean you're better off staying in cash.
On the other hand, if capacity utilization were to go as high as 80% in the coming months, this could get very inflationary. You would be better off staying in precious metals.
Historically, when capacity utilization reaches 80%, inflation will be apparent one year later. This means we will see gold and silver prices increase dramatically in 2013, which is bullish for GLD, PHYS, AGQ, PSLV. As long as we don't see a plunge in the chart below.